Correlation Between Prudential High and Commodities Strategy
Can any of the company-specific risk be diversified away by investing in both Prudential High and Commodities Strategy 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 Prudential High and Commodities Strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential High Yield and Commodities Strategy Fund, you can compare the effects of market volatilities on Prudential High and Commodities Strategy 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 Prudential High with a short position of Commodities Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential High and Commodities Strategy.
Diversification Opportunities for Prudential High and Commodities Strategy
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PRUDENTIAL and Commodities is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Prudential High Yield and Commodities Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commodities Strategy and Prudential High 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 Prudential High Yield are associated (or correlated) with Commodities Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commodities Strategy has no effect on the direction of Prudential High i.e., Prudential High and Commodities Strategy go up and down completely randomly.
Pair Corralation between Prudential High and Commodities Strategy
Assuming the 90 days horizon Prudential High is expected to generate 2.24 times less return on investment than Commodities Strategy. But when comparing it to its historical volatility, Prudential High Yield is 7.26 times less risky than Commodities Strategy. It trades about 0.4 of its potential returns per unit of risk. Commodities Strategy Fund is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 7,877 in Commodities Strategy Fund on March 31, 2025 and sell it today you would earn a total of 472.00 from holding Commodities Strategy Fund or generate 5.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential High Yield vs. Commodities Strategy Fund
Performance |
| Timeline |
| Prudential High Yield |
| Commodities Strategy |
Prudential High and Commodities Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential High and Commodities Strategy
The main advantage of trading using opposite Prudential High and Commodities Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential High position performs unexpectedly, Commodities Strategy 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 Commodities Strategy will offset losses from the drop in Commodities Strategy's long position.| Prudential High vs. Prudential Jennison International | Prudential High vs. Prudential Emerging Markets | Prudential High vs. Prudential Floating Rate | Prudential High vs. Prudential Jennison Global |
| Commodities Strategy vs. Metropolitan West High | Commodities Strategy vs. Barings High Yield | Commodities Strategy vs. Prudential High Yield | Commodities Strategy vs. Transamerica High Yield |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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