Correlation Between Guidemark Large and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both Guidemark Large and Prudential Jennison at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Guidemark Large and Prudential Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidemark Large Cap and Prudential Jennison Financial, you can compare the effects of market volatilities on Guidemark Large and Prudential Jennison and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Guidemark Large with a short position of Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidemark Large and Prudential Jennison.
Diversification Opportunities for Guidemark Large and Prudential Jennison
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guidemark and Prudential is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Guidemark Large Cap and Prudential Jennison Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison and Guidemark Large is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Guidemark Large Cap are associated (or correlated) with Prudential Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Jennison has no effect on the direction of Guidemark Large i.e., Guidemark Large and Prudential Jennison go up and down completely randomly.
Pair Corralation between Guidemark Large and Prudential Jennison
Assuming the 90 days horizon Guidemark Large Cap is expected to generate 0.64 times more return on investment than Prudential Jennison. However, Guidemark Large Cap is 1.56 times less risky than Prudential Jennison. It trades about 0.15 of its potential returns per unit of risk. Prudential Jennison Financial is currently generating about 0.05 per unit of risk. If you would invest 1,138 in Guidemark Large Cap on March 29, 2025 and sell it today you would earn a total of 143.00 from holding Guidemark Large Cap or generate 12.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guidemark Large Cap vs. Prudential Jennison Financial
Performance |
| Timeline |
| Guidemark Large Cap |
| Prudential Jennison |
Guidemark Large and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidemark Large and Prudential Jennison
The main advantage of trading using opposite Guidemark Large and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidemark Large position performs unexpectedly, Prudential Jennison can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Prudential Jennison will offset losses from the drop in Prudential Jennison's long position.| Guidemark Large vs. Short Oil Gas | Guidemark Large vs. Global Resources Fund | Guidemark Large vs. Firsthand Alternative Energy | Guidemark Large vs. Icon Natural Resources |
| Prudential Jennison vs. Guidemark Large Cap | Prudential Jennison vs. Qs Large Cap | Prudential Jennison vs. Profunds Large Cap Growth | Prudential Jennison vs. Qs Large Cap |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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