Correlation Between Prudential Real and Western Asset
Can any of the company-specific risk be diversified away by investing in both Prudential Real and Western Asset 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 Western Asset 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 Western Asset E, you can compare the effects of market volatilities on Prudential Real and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Real and Western Asset.
Diversification Opportunities for Prudential Real and Western Asset
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Prudential and Western is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Real Estate and Western Asset E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset E 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset E has no effect on the direction of Prudential Real i.e., Prudential Real and Western Asset go up and down completely randomly.
Pair Corralation between Prudential Real and Western Asset
Assuming the 90 days horizon Prudential Real is expected to generate 1.03 times less return on investment than Western Asset. In addition to that, Prudential Real is 2.82 times more volatile than Western Asset E. It trades about 0.05 of its total potential returns per unit of risk. Western Asset E is currently generating about 0.14 per unit of volatility. If you would invest 904.00 in Western Asset E on June 3, 2025 and sell it today you would earn a total of 25.00 from holding Western Asset E or generate 2.77% 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. Western Asset E
Performance |
| Timeline |
| Prudential Real Estate |
| Western Asset E |
Prudential Real and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Real and Western Asset
The main advantage of trading using opposite Prudential Real and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Real position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset'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 |
| Western Asset vs. Jpmorgan Diversified Fund | Western Asset vs. American Funds Conservative | Western Asset vs. Mainstay Conservative Allocation | Western Asset vs. Invesco Diversified Dividend |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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