Correlation Between Chase Growth and Prudential Balanced

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

By analyzing existing cross correlation between Chase Growth Fund and Prudential Balanced Fund, you can compare the effects of market volatilities on Chase Growth and Prudential Balanced 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 Chase Growth with a short position of Prudential Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chase Growth and Prudential Balanced.

Diversification Opportunities for Chase Growth and Prudential Balanced

0.99

Correlation Coefficient

Chase Growth  Prudential Balanced

No risk reduction

The 3 months correlation between Chase and Prudential is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Chase Growth Fund and Prudential Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Balanced and Chase Growth 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 Chase Growth Fund are associated (or correlated) with Prudential Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Balanced has no effect on the direction of Chase Growth i.e., Chase Growth and Prudential Balanced go up and down completely randomly.

Pair Corralation between Chase Growth and Prudential Balanced

Assuming the 90 days horizon Chase Growth Fund is expected to generate 1.69 times more return on investment than Prudential Balanced. However, Chase Growth is 1.69 times more volatile than Prudential Balanced Fund. It trades about 0.28 of its potential returns per unit of risk. Prudential Balanced Fund is currently generating about 0.24 per unit of risk. If you would invest  1,381  in Chase Growth Fund on May 13, 2025 and sell it today you would earn a total of  182.00  from holding Chase Growth Fund or generate 13.18% return on investment over 90 days.

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

Chase Growth Fund  vs.  Prudential Balanced Fund

Chase Growth

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Chase Growth Fund are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Chase Growth showed solid returns over the last few months and may actually be approaching a breakup point.

Prudential Balanced

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Prudential Balanced Fund are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Prudential Balanced may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Chase Growth and Prudential Balanced

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

The idea behind Chase Growth Fund and Prudential Balanced Fund 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.