Correlation Between Prudential Financial and AES
Can any of the company-specific risk be diversified away by investing in both Prudential Financial and AES 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 Financial and AES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Financial and The AES, you can compare the effects of market volatilities on Prudential Financial and AES 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 Financial with a short position of AES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Financial and AES.
Diversification Opportunities for Prudential Financial and AES
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Prudential and AES is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Financial and The AES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AES and Prudential Financial 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 Financial are associated (or correlated) with AES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AES has no effect on the direction of Prudential Financial i.e., Prudential Financial and AES go up and down completely randomly.
Pair Corralation between Prudential Financial and AES
Assuming the 90 days trading horizon Prudential Financial is expected to under-perform the AES. But the stock apears to be less risky and, when comparing its historical volatility, Prudential Financial is 2.75 times less risky than AES. The stock trades about -0.08 of its potential returns per unit of risk. The The AES is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 7,189 in The AES on September 2, 2025 and sell it today you would earn a total of 262.00 from holding The AES or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Financial vs. The AES
Performance |
| Timeline |
| Prudential Financial |
| AES |
Prudential Financial and AES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Financial and AES
The main advantage of trading using opposite Prudential Financial and AES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Financial position performs unexpectedly, AES 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 AES will offset losses from the drop in AES's long position.| Prudential Financial vs. Marvell Technology | Prudential Financial vs. salesforce inc | Prudential Financial vs. GX AI TECH | Prudential Financial vs. Unity Software |
| AES vs. KB Financial Group | AES vs. UnitedHealth Group Incorporated | AES vs. Prudential Financial | AES vs. Principal Financial Group, |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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