Correlation Between Prudential Jennison and Gurtin California
Can any of the company-specific risk be diversified away by investing in both Prudential Jennison and Gurtin California 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 Jennison and Gurtin California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Jennison Small and Gurtin California Muni, you can compare the effects of market volatilities on Prudential Jennison and Gurtin California 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 Jennison with a short position of Gurtin California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and Gurtin California.
Diversification Opportunities for Prudential Jennison and Gurtin California
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Prudential and Gurtin is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Small and Gurtin California Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gurtin California Muni and Prudential Jennison 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 Jennison Small are associated (or correlated) with Gurtin California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gurtin California Muni has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and Gurtin California go up and down completely randomly.
Pair Corralation between Prudential Jennison and Gurtin California
Assuming the 90 days horizon Prudential Jennison Small is expected to generate 11.0 times more return on investment than Gurtin California. However, Prudential Jennison is 11.0 times more volatile than Gurtin California Muni. It trades about 0.15 of its potential returns per unit of risk. Gurtin California Muni is currently generating about 0.3 per unit of risk. If you would invest 2,284 in Prudential Jennison Small on June 1, 2025 and sell it today you would earn a total of 194.00 from holding Prudential Jennison Small or generate 8.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Prudential Jennison Small vs. Gurtin California Muni
Performance |
| Timeline |
| Prudential Jennison Small |
| Gurtin California Muni |
Risk-Adjusted Performance
Solid
Weak | Strong |
Prudential Jennison and Gurtin California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Jennison and Gurtin California
The main advantage of trading using opposite Prudential Jennison and Gurtin California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Jennison position performs unexpectedly, Gurtin California 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 Gurtin California will offset losses from the drop in Gurtin California's long position.The idea behind Prudential Jennison Small and Gurtin California Muni 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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