Correlation Between Aew Real and Prudential Select
Can any of the company-specific risk be diversified away by investing in both Aew Real and Prudential Select 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 Aew Real and Prudential Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aew Real Estate and Prudential Select Real, you can compare the effects of market volatilities on Aew Real and Prudential Select 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 Aew Real with a short position of Prudential Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aew Real and Prudential Select.
Diversification Opportunities for Aew Real and Prudential Select
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Aew and PRUDENTIAL is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Aew Real Estate and Prudential Select Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Select Real and Aew Real 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 Aew Real Estate are associated (or correlated) with Prudential Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Select Real has no effect on the direction of Aew Real i.e., Aew Real and Prudential Select go up and down completely randomly.
Pair Corralation between Aew Real and Prudential Select
Assuming the 90 days horizon Aew Real is expected to generate 1.67 times less return on investment than Prudential Select. But when comparing it to its historical volatility, Aew Real Estate is 1.03 times less risky than Prudential Select. It trades about 0.07 of its potential returns per unit of risk. Prudential Select Real is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,348 in Prudential Select Real on April 7, 2025 and sell it today you would earn a total of 18.00 from holding Prudential Select Real or generate 1.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aew Real Estate vs. Prudential Select Real
Performance |
| Timeline |
| Aew Real Estate |
| Prudential Select Real |
Aew Real and Prudential Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aew Real and Prudential Select
The main advantage of trading using opposite Aew Real and Prudential Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aew Real position performs unexpectedly, Prudential Select 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 Select will offset losses from the drop in Prudential Select's long position.| Aew Real vs. Asg Managed Futures | Aew Real vs. Asg Managed Futures | Aew Real vs. Natixis Oakmark | Aew Real vs. Natixis Oakmark International |
| Prudential Select vs. Siit Small Cap | Prudential Select vs. Goldman Sachs Growth | Prudential Select vs. Morningstar Growth Etf | Prudential Select vs. Pnc International Growth |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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