Correlation Between Prudential California and Target 2010

Can any of the company-specific risk be diversified away by investing in both Prudential California and Target 2010 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 California and Target 2010 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Prudential California Muni and Target 2010 Series, you can compare the effects of market volatilities on Prudential California and Target 2010 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 California with a short position of Target 2010. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential California and Target 2010.

Diversification Opportunities for Prudential California and Target 2010

0.0

Correlation Coefficient

Prudential California  Target 2010

Pay attention - limited upside

The 3 months correlation between Prudential and Target is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Prudential California Muni and Target 2010 Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target 2010 Series and Prudential California 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 California Muni are associated (or correlated) with Target 2010. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target 2010 Series has no effect on the direction of Prudential California i.e., Prudential California and Target 2010 go up and down completely randomly.

Pair Corralation between Prudential California and Target 2010

If you would invest  962.00  in Prudential California Muni on May 21, 2025 and sell it today you would earn a total of  16.00  from holding Prudential California Muni or generate 1.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Prudential California Muni  vs.  Target 2010 Series

Prudential California

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Prudential California Muni are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Prudential California is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Target 2010 Series

Risk-Adjusted Performance

Weakest

Over the last 90 days Target 2010 Series has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Target 2010 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 California and Target 2010

The main advantage of trading using opposite Prudential California and Target 2010 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential California position performs unexpectedly, Target 2010 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 Target 2010 will offset losses from the drop in Target 2010's long position.

The idea behind Prudential California Muni and Target 2010 Series 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.