Correlation Between Multimanager Lifestyle and Prudential Health
Can any of the company-specific risk be diversified away by investing in both Multimanager Lifestyle and Prudential Health 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 Multimanager Lifestyle and Prudential Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multimanager Lifestyle Moderate and Prudential Health Sciences, you can compare the effects of market volatilities on Multimanager Lifestyle and Prudential Health 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 Multimanager Lifestyle with a short position of Prudential Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multimanager Lifestyle and Prudential Health.
Diversification Opportunities for Multimanager Lifestyle and Prudential Health
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Multimanager and Prudential is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Multimanager Lifestyle Moderat and Prudential Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Health and Multimanager 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 Multimanager Lifestyle Moderate are associated (or correlated) with Prudential Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Health has no effect on the direction of Multimanager Lifestyle i.e., Multimanager Lifestyle and Prudential Health go up and down completely randomly.
Pair Corralation between Multimanager Lifestyle and Prudential Health
Assuming the 90 days horizon Multimanager Lifestyle is expected to generate 1.25 times less return on investment than Prudential Health. But when comparing it to its historical volatility, Multimanager Lifestyle Moderate is 3.52 times less risky than Prudential Health. It trades about 0.21 of its potential returns per unit of risk. Prudential Health Sciences is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4,122 in Prudential Health Sciences on June 6, 2025 and sell it today you would earn a total of 187.00 from holding Prudential Health Sciences or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multimanager Lifestyle Moderat vs. Prudential Health Sciences
Performance |
| Timeline |
| Multimanager Lifestyle |
| Prudential Health |
Multimanager Lifestyle and Prudential Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multimanager Lifestyle and Prudential Health
The main advantage of trading using opposite Multimanager Lifestyle and Prudential Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multimanager Lifestyle position performs unexpectedly, Prudential Health 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 Health will offset losses from the drop in Prudential Health's long position.The idea behind Multimanager Lifestyle Moderate and Prudential Health Sciences pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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