Correlation Between Advanced Micro and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both Advanced Micro and Prudential Jennison 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 Advanced Micro and Prudential Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Micro Devices and Prudential Jennison International, you can compare the effects of market volatilities on Advanced Micro and Prudential Jennison 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 Advanced Micro with a short position of Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and Prudential Jennison.
Diversification Opportunities for Advanced Micro and Prudential Jennison
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Advanced and Prudential is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and Prudential Jennison Internatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison and Advanced Micro 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 Advanced Micro Devices are associated (or correlated) with Prudential Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Jennison has no effect on the direction of Advanced Micro i.e., Advanced Micro and Prudential Jennison go up and down completely randomly.
Pair Corralation between Advanced Micro and Prudential Jennison
Considering the 90-day investment horizon Advanced Micro Devices is expected to under-perform the Prudential Jennison. In addition to that, Advanced Micro is 3.13 times more volatile than Prudential Jennison International. It trades about -0.24 of its total potential returns per unit of risk. Prudential Jennison International is currently generating about -0.28 per unit of volatility. If you would invest 3,051 in Prudential Jennison International on January 25, 2024 and sell it today you would lose (174.00) from holding Prudential Jennison International or give up 5.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Micro Devices vs. Prudential Jennison Internatio
Performance |
| Timeline |
| Advanced Micro Devices |
| Prudential Jennison |
Advanced Micro and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Micro and Prudential Jennison
The main advantage of trading using opposite Advanced Micro and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro position performs unexpectedly, Prudential Jennison 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 Jennison will offset losses from the drop in Prudential Jennison's long position.| Advanced Micro vs. Taiwan Semiconductor Manufacturing | Advanced Micro vs. Intel | Advanced Micro vs. Marvell Technology Group | Advanced Micro vs. Micron Technology |
| Prudential Jennison vs. Fidelity Small Cap | Prudential Jennison vs. Fidelity Advisor Mid | Prudential Jennison vs. Aquagold International | Prudential Jennison vs. Morningstar Unconstrained Allocation |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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