Correlation Between PRUDENTIAL and SPACE

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

By analyzing existing cross correlation between PRUDENTIAL FINL INC and SPACE, you can compare the effects of market volatilities on PRUDENTIAL and SPACE 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 with a short position of SPACE. Check out your portfolio center. Please also check ongoing floating volatility patterns of PRUDENTIAL and SPACE.

Diversification Opportunities for PRUDENTIAL and SPACE

0.63

Correlation Coefficient

PRUDENTIAL  SPACE

Poor diversification

The 3 months correlation between PRUDENTIAL and SPACE is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding PRUDENTIAL FINL INC and SPACE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPACE and PRUDENTIAL 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 FINL INC are associated (or correlated) with SPACE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPACE has no effect on the direction of PRUDENTIAL i.e., PRUDENTIAL and SPACE go up and down completely randomly.

Pair Corralation between PRUDENTIAL and SPACE

Assuming the 90 days trading horizon PRUDENTIAL is expected to generate 15.15 times less return on investment than SPACE. But when comparing it to its historical volatility, PRUDENTIAL FINL INC is 5.8 times less risky than SPACE. It trades about 0.04 of its potential returns per unit of risk. SPACE is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  18.00  in SPACE on February 17, 2025 and sell it today you would earn a total of  2.00  from holding SPACE or generate 11.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	90.91%
Values	Daily Returns

PRUDENTIAL FINL INC  vs.  SPACE

PRUDENTIAL FINL INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days PRUDENTIAL FINL INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, PRUDENTIAL is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

SPACE

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPACE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in June 2025. The latest tumult may also be a sign of longer-term up-swing for SPACE shareholders.

Pair Trading with PRUDENTIAL and SPACE

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

The idea behind PRUDENTIAL FINL INC and SPACE 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.