Correlation Between Prudential High and Wasatch Emerging

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

By analyzing existing cross correlation between Prudential High Yield and Wasatch Emerging India, you can compare the effects of market volatilities on Prudential High and Wasatch 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 High with a short position of Wasatch Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential High and Wasatch Emerging.

Diversification Opportunities for Prudential High and Wasatch Emerging

-0.15

Correlation Coefficient

Prudential High  Wasatch Emerging

Good diversification

The 3 months correlation between Prudential and Wasatch is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Prudential High Yield and Wasatch Emerging India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch Emerging India and Prudential High 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 High Yield are associated (or correlated) with Wasatch Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch Emerging India has no effect on the direction of Prudential High i.e., Prudential High and Wasatch Emerging go up and down completely randomly.

Pair Corralation between Prudential High and Wasatch Emerging

Assuming the 90 days horizon Prudential High Yield is expected to generate 0.22 times more return on investment than Wasatch Emerging. However, Prudential High Yield is 4.51 times less risky than Wasatch Emerging. It trades about 0.13 of its potential returns per unit of risk. Wasatch Emerging India is currently generating about 0.0 per unit of risk. If you would invest  452.00  in Prudential High Yield on August 2, 2025 and sell it today you would earn a total of  35.00  from holding Prudential High Yield or generate 7.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Prudential High Yield  vs.  Wasatch Emerging India

Prudential High Yield

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Prudential High Yield are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Prudential High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Wasatch Emerging India

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wasatch Emerging India are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Wasatch Emerging 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 High and Wasatch Emerging

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

The idea behind Prudential High Yield and Wasatch Emerging India 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.