Correlation Between Prudential Jennison and Mainstay Cushing

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

By analyzing existing cross correlation between Prudential Jennison Financial and Mainstay Cushing Mlp, you can compare the effects of market volatilities on Prudential Jennison and Mainstay Cushing 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 Mainstay Cushing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and Mainstay Cushing.

Diversification Opportunities for Prudential Jennison and Mainstay Cushing

0.34

Correlation Coefficient

Prudential Jennison  Mainstay Cushing

Weak diversification

The 3 months correlation between Prudential and Mainstay is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Financial and Mainstay Cushing Mlp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Cushing Mlp 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 Financial are associated (or correlated) with Mainstay Cushing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Cushing Mlp has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and Mainstay Cushing go up and down completely randomly.

Pair Corralation between Prudential Jennison and Mainstay Cushing

Assuming the 90 days horizon Prudential Jennison Financial is expected to generate 0.94 times more return on investment than Mainstay Cushing. However, Prudential Jennison Financial is 1.07 times less risky than Mainstay Cushing. It trades about -0.06 of its potential returns per unit of risk. Mainstay Cushing Mlp is currently generating about -0.14 per unit of risk. If you would invest  2,549  in Prudential Jennison Financial on December 4, 2024 and sell it today you would lose (30.00) from holding Prudential Jennison Financial or give up 1.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Prudential Jennison Financial  vs.  Mainstay Cushing Mlp

Prudential Jennison

Risk-Adjusted Performance

Very Weak

Over the last 90 days Prudential Jennison Financial has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Mainstay Cushing Mlp

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Prudential Jennison and Mainstay Cushing

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

The idea behind Prudential Jennison Financial and Mainstay Cushing Mlp 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..