Correlation Between Prudential Short and Veea

Can any of the company-specific risk be diversified away by investing in both Prudential Short and Veea 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 Short and Veea into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Prudential Short Duration and Veea Inc, you can compare the effects of market volatilities on Prudential Short and Veea 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 Short with a short position of Veea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Short and Veea.

Diversification Opportunities for Prudential Short and Veea

-0.27

Correlation Coefficient

Prudential Short  Veea

Very good diversification

The 3 months correlation between Prudential and Veea is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Short Duration and Veea Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veea Inc and Prudential Short 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 Short Duration are associated (or correlated) with Veea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veea Inc has no effect on the direction of Prudential Short i.e., Prudential Short and Veea go up and down completely randomly.

Pair Corralation between Prudential Short and Veea

Assuming the 90 days horizon Prudential Short Duration is expected to under-perform the Veea. But the mutual fund apears to be less risky and, when comparing its historical volatility, Prudential Short Duration is 34.16 times less risky than Veea. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Veea Inc is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  283.00  in Veea Inc on September 28, 2024 and sell it today you would earn a total of  78.00  from holding Veea Inc or generate 27.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Prudential Short Duration  vs.  Veea Inc

Prudential Short Duration

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prudential Short Duration has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Prudential Short is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Veea Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Veea Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Prudential Short and Veea

The main advantage of trading using opposite Prudential Short and Veea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Short position performs unexpectedly, Veea 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 Veea will offset losses from the drop in Veea's long position.

The idea behind Prudential Short Duration and Veea Inc 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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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 Transaction History module to view history of all your transactions and understand their impact on performance.