Correlation Between Prudential Financial and Tfa Quantitative

Can any of the company-specific risk be diversified away by investing in both Prudential Financial and Tfa Quantitative 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 Tfa Quantitative 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 Tfa Quantitative, you can compare the effects of market volatilities on Prudential Financial and Tfa Quantitative 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 Tfa Quantitative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Financial and Tfa Quantitative.

Diversification Opportunities for Prudential Financial and Tfa Quantitative

0.87

Correlation Coefficient

Prudential Financial  Tfa Quantitative

Very poor diversification

The 3 months correlation between Prudential and Tfa is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Financial Services and Tfa Quantitative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tfa Quantitative 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 Tfa Quantitative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tfa Quantitative has no effect on the direction of Prudential Financial i.e., Prudential Financial and Tfa Quantitative go up and down completely randomly.

Pair Corralation between Prudential Financial and Tfa Quantitative

Assuming the 90 days horizon Prudential Financial is expected to generate 1.35 times less return on investment than Tfa Quantitative. In addition to that, Prudential Financial is 1.31 times more volatile than Tfa Quantitative. It trades about 0.12 of its total potential returns per unit of risk. Tfa Quantitative is currently generating about 0.22 per unit of volatility. If you would invest  1,070  in Tfa Quantitative on May 26, 2025 and sell it today you would earn a total of  100.00  from holding Tfa Quantitative or generate 9.35% return on investment over 90 days.

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

Prudential Financial Services  vs.  Tfa Quantitative

Prudential Financial

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Prudential Financial Services are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Prudential Financial may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Tfa Quantitative

Risk-Adjusted Performance

Solid

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

Pair Trading with Prudential Financial and Tfa Quantitative

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

The idea behind Prudential Financial Services and Tfa Quantitative 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.