Correlation Between Valic Company and Prudential Emerging
Can any of the company-specific risk be diversified away by investing in both Valic Company 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 Valic Company and Prudential Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valic Company I and Prudential Emerging Markets, you can compare the effects of market volatilities on Valic Company 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 Valic Company with a short position of Prudential Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Prudential Emerging.
Diversification Opportunities for Valic Company and Prudential Emerging
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Valic and Prudential is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Prudential Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Emerging and Valic Company 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 Valic Company I 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 Valic Company i.e., Valic Company and Prudential Emerging go up and down completely randomly.
Pair Corralation between Valic Company and Prudential Emerging
Assuming the 90 days horizon Valic Company I is expected to generate 2.75 times more return on investment than Prudential Emerging. However, Valic Company is 2.75 times more volatile than Prudential Emerging Markets. It trades about 0.17 of its potential returns per unit of risk. Prudential Emerging Markets is currently generating about 0.13 per unit of risk. If you would invest 1,127 in Valic Company I on June 12, 2025 and sell it today you would earn a total of 136.00 from holding Valic Company I or generate 12.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Prudential Emerging Markets
Performance |
| Timeline |
| Valic Company I |
| Prudential Emerging |
Valic Company and Prudential Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Prudential Emerging
The main advantage of trading using opposite Valic Company and Prudential Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company 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.| Valic Company vs. Profunds Large Cap Growth | Valic Company vs. M Large Cap | Valic Company vs. Qs Large Cap | Valic Company vs. Dreyfus Large Cap |
| Prudential Emerging vs. Franklin Government Money | Prudential Emerging vs. Matson Money Equity | Prudential Emerging vs. Icon Financial Fund | Prudential Emerging vs. John Hancock Money |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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