Correlation Between Vanguard Energy and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both Vanguard Energy and Prudential Jennison 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 Vanguard Energy and Prudential Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Energy Index and Prudential Jennison Mid Cap, you can compare the effects of market volatilities on Vanguard Energy and Prudential Jennison 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 Vanguard Energy with a short position of Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Energy and Prudential Jennison.
Diversification Opportunities for Vanguard Energy and Prudential Jennison
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vanguard and Prudential is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Energy Index and Prudential Jennison Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison Mid and Vanguard Energy 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 Vanguard Energy Index are associated (or correlated) with Prudential Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Jennison Mid has no effect on the direction of Vanguard Energy i.e., Vanguard Energy and Prudential Jennison go up and down completely randomly.
Pair Corralation between Vanguard Energy and Prudential Jennison
Assuming the 90 days horizon Vanguard Energy Index is expected to generate 1.4 times more return on investment than Prudential Jennison. However, Vanguard Energy is 1.4 times more volatile than Prudential Jennison Mid Cap. It trades about 0.11 of its potential returns per unit of risk. Prudential Jennison Mid Cap is currently generating about 0.11 per unit of risk. If you would invest 5,737 in Vanguard Energy Index on May 27, 2025 and sell it today you would earn a total of 449.00 from holding Vanguard Energy Index or generate 7.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Energy Index vs. Prudential Jennison Mid Cap
Performance |
| Timeline |
| Vanguard Energy Index |
| Prudential Jennison Mid |
Vanguard Energy and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Energy and Prudential Jennison
The main advantage of trading using opposite Vanguard Energy and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Energy position performs unexpectedly, Prudential Jennison 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 Jennison will offset losses from the drop in Prudential Jennison's long position.| Vanguard Energy vs. Vanguard Financials Index | Vanguard Energy vs. Vanguard Utilities Index | Vanguard Energy vs. Vanguard Materials Index | Vanguard Energy vs. Vanguard Sumer Staples |
| Prudential Jennison vs. Blackrock Financial Institutions | Prudential Jennison vs. Icon Financial Fund | Prudential Jennison vs. Angel Oak Financial | Prudential Jennison vs. Rmb Mendon Financial |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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