Correlation Between PRUDENTIAL and Meiwu Technology

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

By analyzing existing cross correlation between PRUDENTIAL FINL INC and Meiwu Technology Co, you can compare the effects of market volatilities on PRUDENTIAL and Meiwu Technology 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 with a short position of Meiwu Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of PRUDENTIAL and Meiwu Technology.

Diversification Opportunities for PRUDENTIAL and Meiwu Technology

-0.35

Correlation Coefficient

PRUDENTIAL  Meiwu Technology

Very good diversification

The 3 months correlation between PRUDENTIAL and Meiwu is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding PRUDENTIAL FINL INC and Meiwu Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiwu Technology and PRUDENTIAL 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 FINL INC are associated (or correlated) with Meiwu Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meiwu Technology has no effect on the direction of PRUDENTIAL i.e., PRUDENTIAL and Meiwu Technology go up and down completely randomly.

Pair Corralation between PRUDENTIAL and Meiwu Technology

Assuming the 90 days trading horizon PRUDENTIAL FINL INC is expected to generate 5.97 times more return on investment than Meiwu Technology. However, PRUDENTIAL is 5.97 times more volatile than Meiwu Technology Co. It trades about 0.04 of its potential returns per unit of risk. Meiwu Technology Co is currently generating about 0.0 per unit of risk. If you would invest  10,291  in PRUDENTIAL FINL INC on September 13, 2024 and sell it today you would earn a total of  322.00  from holding PRUDENTIAL FINL INC or generate 3.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	84.44%
Values	Daily Returns

PRUDENTIAL FINL INC  vs.  Meiwu Technology Co

PRUDENTIAL FINL INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PRUDENTIAL FINL INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, PRUDENTIAL is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Meiwu Technology

Risk-Adjusted Performance

17 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Meiwu Technology Co are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Meiwu Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PRUDENTIAL and Meiwu Technology

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

The idea behind PRUDENTIAL FINL INC and Meiwu Technology Co 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 Global Correlations module to find global opportunities by holding instruments from different markets.