Correlation Between Prudential Real and Payden Emerging
Can any of the company-specific risk be diversified away by investing in both Prudential Real and Payden Emerging 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 Real and Payden Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Real Estate and Payden Emerging Markets, you can compare the effects of market volatilities on Prudential Real and Payden Emerging 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 Real with a short position of Payden Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Real and Payden Emerging.
Diversification Opportunities for Prudential Real and Payden Emerging
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Prudential and Payden is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Real Estate and Payden Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Emerging Markets and Prudential 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 Prudential Real Estate are associated (or correlated) with Payden Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Emerging Markets has no effect on the direction of Prudential Real i.e., Prudential Real and Payden Emerging go up and down completely randomly.
Pair Corralation between Prudential Real and Payden Emerging
Assuming the 90 days horizon Prudential Real is expected to generate 8.46 times less return on investment than Payden Emerging. In addition to that, Prudential Real is 4.15 times more volatile than Payden Emerging Markets. It trades about 0.01 of its total potential returns per unit of risk. Payden Emerging Markets is currently generating about 0.41 per unit of volatility. If you would invest 1,029 in Payden Emerging Markets on June 7, 2025 and sell it today you would earn a total of 56.00 from holding Payden Emerging Markets or generate 5.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Real Estate vs. Payden Emerging Markets
Performance |
| Timeline |
| Prudential Real Estate |
| Payden Emerging Markets |
Prudential Real and Payden Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Real and Payden Emerging
The main advantage of trading using opposite Prudential Real and Payden Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Real position performs unexpectedly, Payden Emerging 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 Payden Emerging will offset losses from the drop in Payden Emerging's long position.| Prudential Real vs. Realty Income | Prudential Real vs. Dynex Capital | Prudential Real vs. First Industrial Realty | Prudential Real vs. Healthcare Realty Trust |
| Payden Emerging vs. Fidelity Real Estate | Payden Emerging vs. Vanguard Reit Index | Payden Emerging vs. Pender Real Estate | Payden Emerging vs. Global Real Estate |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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