Correlation Between Prudential Financial and Select Us

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

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

Diversification Opportunities for Prudential Financial and Select Us

0.64

Correlation Coefficient

Prudential Financial  Select Us

Poor diversification

The 3 months correlation between Prudential and Select is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Financial Services and Select Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select Equity and Prudential Financial 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 Financial Services are associated (or correlated) with Select Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select Equity has no effect on the direction of Prudential Financial i.e., Prudential Financial and Select Us go up and down completely randomly.

Pair Corralation between Prudential Financial and Select Us

Assuming the 90 days horizon Prudential Financial is expected to generate 29.28 times less return on investment than Select Us. In addition to that, Prudential Financial is 1.54 times more volatile than Select Equity Fund. It trades about 0.0 of its total potential returns per unit of risk. Select Equity Fund is currently generating about 0.22 per unit of volatility. If you would invest  1,615  in Select Equity Fund on July 4, 2025 and sell it today you would earn a total of  117.00  from holding Select Equity Fund or generate 7.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Prudential Financial Services  vs.  Select Equity Fund

Prudential Financial

Risk-Adjusted Performance

Weakest

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

Select Equity

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Select Equity Fund are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Select Us may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Prudential Financial and Select Us

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

The idea behind Prudential Financial Services and Select Equity 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.

Check out your portfolio center.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.