Correlation Between Prudential Jennison and Voya Floating

Can any of the company-specific risk be diversified away by investing in both Prudential Jennison and Voya Floating 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 Voya Floating 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 Voya Floating Rate, you can compare the effects of market volatilities on Prudential Jennison and Voya Floating 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 Voya Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and Voya Floating.

Diversification Opportunities for Prudential Jennison and Voya Floating

-0.13

Correlation Coefficient

Prudential Jennison  Voya Floating

Good diversification

The 3 months correlation between Prudential and Voya is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Financial and Voya Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Floating Rate 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 Voya Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Floating Rate has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and Voya Floating go up and down completely randomly.

Pair Corralation between Prudential Jennison and Voya Floating

Assuming the 90 days horizon Prudential Jennison Financial is expected to generate 4.96 times more return on investment than Voya Floating. However, Prudential Jennison is 4.96 times more volatile than Voya Floating Rate. It trades about 0.06 of its potential returns per unit of risk. Voya Floating Rate is currently generating about 0.17 per unit of risk. If you would invest  1,827  in Prudential Jennison Financial on October 22, 2024 and sell it today you would earn a total of  675.00  from holding Prudential Jennison Financial or generate 36.95% return on investment over 90 days.

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

Prudential Jennison Financial  vs.  Voya Floating Rate

Prudential Jennison

Risk-Adjusted Performance

0 of 100

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 fairly strong basic indicators, Prudential Jennison is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Voya Floating Rate

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Floating Rate are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Voya Floating 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 Voya Floating

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

The idea behind Prudential Jennison Financial and Voya Floating Rate 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.