Correlation Between Vanguard Global and Prudential Emerging
Can any of the company-specific risk be diversified away by investing in both Vanguard Global and Prudential 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 Vanguard Global and Prudential Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Global Equity and Prudential Emerging Markets, you can compare the effects of market volatilities on Vanguard Global and Prudential 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 Vanguard Global with a short position of Prudential Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Global and Prudential Emerging.
Diversification Opportunities for Vanguard Global and Prudential Emerging
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VANGUARD and Prudential is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Global Equity and Prudential Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Emerging and Vanguard Global 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 Global Equity are associated (or correlated) with Prudential Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Emerging has no effect on the direction of Vanguard Global i.e., Vanguard Global and Prudential Emerging go up and down completely randomly.
Pair Corralation between Vanguard Global and Prudential Emerging
Assuming the 90 days horizon Vanguard Global Equity is expected to generate 2.02 times more return on investment than Prudential Emerging. However, Vanguard Global is 2.02 times more volatile than Prudential Emerging Markets. It trades about 0.16 of its potential returns per unit of risk. Prudential Emerging Markets is currently generating about 0.15 per unit of risk. If you would invest 3,786 in Vanguard Global Equity on June 5, 2025 and sell it today you would earn a total of 282.00 from holding Vanguard Global Equity or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Global Equity vs. Prudential Emerging Markets
Performance |
| Timeline |
| Vanguard Global Equity |
| Prudential Emerging |
Vanguard Global and Prudential Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Global and Prudential Emerging
The main advantage of trading using opposite Vanguard Global and Prudential Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Global position performs unexpectedly, Prudential 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 Prudential Emerging will offset losses from the drop in Prudential Emerging's long position.| Vanguard Global vs. Vanguard Strategic Equity | Vanguard Global vs. Vanguard International Value | Vanguard Global vs. Vanguard Selected Value | Vanguard Global vs. Vanguard International Explorer |
| Prudential Emerging vs. Bbh Intermediate Municipal | Prudential Emerging vs. Vanguard Intermediate Term Tax Exempt | Prudential Emerging vs. T Rowe Price | Prudential Emerging vs. Morningstar Defensive Bond |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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