Correlation Between Lifestyle and Prudential Short
Can any of the company-specific risk be diversified away by investing in both Lifestyle and Prudential Short 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 Lifestyle and Prudential Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifestyle Ii Moderate and Prudential Short Duration, you can compare the effects of market volatilities on Lifestyle and Prudential Short 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 Lifestyle with a short position of Prudential Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifestyle and Prudential Short.
Diversification Opportunities for Lifestyle and Prudential Short
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lifestyle and Prudential is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Lifestyle Ii Moderate and Prudential Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Short Duration and Lifestyle 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 Lifestyle Ii Moderate are associated (or correlated) with Prudential Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Short Duration has no effect on the direction of Lifestyle i.e., Lifestyle and Prudential Short go up and down completely randomly.
Pair Corralation between Lifestyle and Prudential Short
Assuming the 90 days horizon Lifestyle Ii Moderate is expected to generate 2.55 times more return on investment than Prudential Short. However, Lifestyle is 2.55 times more volatile than Prudential Short Duration. It trades about 0.22 of its potential returns per unit of risk. Prudential Short Duration is currently generating about 0.23 per unit of risk. If you would invest 1,107 in Lifestyle Ii Moderate on June 5, 2025 and sell it today you would earn a total of 45.00 from holding Lifestyle Ii Moderate or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lifestyle Ii Moderate vs. Prudential Short Duration
Performance |
| Timeline |
| Lifestyle Ii Moderate |
| Prudential Short Duration |
Lifestyle and Prudential Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lifestyle and Prudential Short
The main advantage of trading using opposite Lifestyle and Prudential Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifestyle position performs unexpectedly, Prudential Short 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 Short will offset losses from the drop in Prudential Short's long position.| Lifestyle vs. Federated Government Income | Lifestyle vs. Vanguard Short Term Government | Lifestyle vs. Us Government Securities | Lifestyle vs. Ridgeworth Seix Government |
| Prudential Short vs. First Eagle Gold | Prudential Short vs. Europac Gold Fund | Prudential Short vs. Deutsche Gold Precious | Prudential Short vs. Gabelli Gold Fund |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| AI Portfolio Prophet Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |