diversifiable risk of combining PRUDENTIAL CORPORATE and SIIT EMERGING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PRUDENTIAL CORPORATE BOND and SIIT EMERGING MARKETS, you can compare the effects of market volatilities on PRUDENTIAL CORPORATE and SIIT EMERGING 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 CORPORATE with a short position of SIIT EMERGING. Check out your portfolio center. Please also check ongoing floating volatility patterns of PRUDENTIAL CORPORATE and SIIT EMERGING.
Diversification Opportunities for PRUDENTIAL CORPORATE and SIIT EMERGING
Pair Corralation between PRUDENTIAL CORPORATE and SIIT EMERGING
PRUDENTIAL CORPORATE BOND vs. SIIT EMERGING MARKETS
PRUDENTIAL CORPORATE and SIIT EMERGING Volatility Contrast
Pair Trading with PRUDENTIAL CORPORATE and SIIT EMERGINGThe main advantage of trading using opposite PRUDENTIAL CORPORATE and SIIT EMERGING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PRUDENTIAL CORPORATE position performs unexpectedly, SIIT EMERGING 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 SIIT EMERGING will offset losses from the drop in SIIT EMERGING's long position. The idea behind PRUDENTIAL CORPORATE BOND and SIIT EMERGING MARKETS 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.
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.