Correlation Between Prudential Real and Ab All

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

By analyzing existing cross correlation between Prudential Real Estate and Ab All China, you can compare the effects of market volatilities on Prudential Real and Ab All 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 Real with a short position of Ab All. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Real and Ab All.

Diversification Opportunities for Prudential Real and Ab All

-0.06

Correlation Coefficient

Prudential Real  Ab All

Good diversification

The 3 months correlation between Prudential and ACEAX is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Real Estate and Ab All China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab All China and Prudential Real 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 Real Estate are associated (or correlated) with Ab All. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab All China has no effect on the direction of Prudential Real i.e., Prudential Real and Ab All go up and down completely randomly.

Pair Corralation between Prudential Real and Ab All

Assuming the 90 days horizon Prudential Real is expected to generate 5.38 times less return on investment than Ab All. But when comparing it to its historical volatility, Prudential Real Estate is 1.05 times less risky than Ab All. It trades about 0.05 of its potential returns per unit of risk. Ab All China is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  877.00  in Ab All China on May 27, 2025 and sell it today you would earn a total of  145.00  from holding Ab All China or generate 16.53% return on investment over 90 days.

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

Prudential Real Estate  vs.  Ab All China

Prudential Real Estate

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Prudential Real Estate are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Prudential Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ab All China

Risk-Adjusted Performance

Solid

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

Pair Trading with Prudential Real and Ab All

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

The idea behind Prudential Real Estate and Ab All China 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.