Correlation Between Prudential Jennison and Matthews Asia

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

By analyzing existing cross correlation between Prudential Jennison Mid Cap and Matthews Asia Dividend, you can compare the effects of market volatilities on Prudential Jennison and Matthews Asia 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 Jennison with a short position of Matthews Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and Matthews Asia.

Diversification Opportunities for Prudential Jennison and Matthews Asia

0.0

Correlation Coefficient

Prudential Jennison  Matthews Asia

Pay attention - limited upside

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

Pair Corralation between Prudential Jennison and Matthews Asia

If you would invest  1,295  in Matthews Asia Dividend on February 4, 2025 and sell it today you would earn a total of  175.00  from holding Matthews Asia Dividend or generate 13.51% return on investment over 90 days.

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

Prudential Jennison Mid Cap  vs.  Matthews Asia Dividend

Prudential Jennison Mid

Risk-Adjusted Performance

Very Weak

Over the last 90 days Prudential Jennison Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Prudential Jennison is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Matthews Asia Dividend

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Matthews Asia Dividend are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Matthews Asia 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 Jennison and Matthews Asia

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

The idea behind Prudential Jennison Mid Cap and Matthews Asia Dividend 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.