Correlation Between World Energy and Pgim Jennison
Can any of the company-specific risk be diversified away by investing in both World Energy and Pgim Jennison 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 World Energy and Pgim Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Energy Fund and Pgim Jennison Technology, you can compare the effects of market volatilities on World Energy and Pgim Jennison 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 World Energy with a short position of Pgim Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Energy and Pgim Jennison.
Diversification Opportunities for World Energy and Pgim Jennison
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between World and Pgim is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding World Energy Fund and Pgim Jennison Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Jennison Technology and World Energy 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 World Energy Fund are associated (or correlated) with Pgim Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pgim Jennison Technology has no effect on the direction of World Energy i.e., World Energy and Pgim Jennison go up and down completely randomly.
Pair Corralation between World Energy and Pgim Jennison
Assuming the 90 days horizon World Energy Fund is expected to generate 0.73 times more return on investment than Pgim Jennison. However, World Energy Fund is 1.37 times less risky than Pgim Jennison. It trades about 0.09 of its potential returns per unit of risk. Pgim Jennison Technology is currently generating about 0.05 per unit of risk. If you would invest 1,361 in World Energy Fund on September 3, 2024 and sell it today you would earn a total of 185.00 from holding World Energy Fund or generate 13.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
World Energy Fund vs. Pgim Jennison Technology
Performance |
| Timeline |
| World Energy |
| Pgim Jennison Technology |
World Energy and Pgim Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Energy and Pgim Jennison
The main advantage of trading using opposite World Energy and Pgim Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Energy position performs unexpectedly, Pgim Jennison 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 Pgim Jennison will offset losses from the drop in Pgim Jennison's long position.| World Energy vs. Fisher Small Cap | World Energy vs. Rbc Small Cap | World Energy vs. Us Small Cap | World Energy vs. Oklahoma College Savings |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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