Correlation Between Ab Select and Pgim Jennison

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Can any of the company-specific risk be diversified away by investing in both Ab Select 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 Ab Select and Pgim Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Select Equity and Pgim Jennison Technology, you can compare the effects of market volatilities on Ab Select 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 Ab Select with a short position of Pgim Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Pgim Jennison.

Diversification Opportunities for Ab Select and Pgim Jennison

AUUIXPgimDiversified AwayAUUIXPgimDiversified Away100%
0.16
  Correlation Coefficient

Average diversification

The 3 months correlation between AUUIX and Pgim is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Equity 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 Ab Select 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 Ab Select Equity 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 Ab Select i.e., Ab Select and Pgim Jennison go up and down completely randomly.

Pair Corralation between Ab Select and Pgim Jennison

Assuming the 90 days horizon Ab Select Equity is expected to under-perform the Pgim Jennison. In addition to that, Ab Select is 1.11 times more volatile than Pgim Jennison Technology. It trades about -0.21 of its total potential returns per unit of risk. Pgim Jennison Technology is currently generating about -0.05 per unit of volatility. If you would invest  2,638  in Pgim Jennison Technology on September 26, 2024 and sell it today you would lose (47.00) from holding Pgim Jennison Technology or give up 1.78% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Ab Select Equity  vs.  Pgim Jennison Technology

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 0510
JavaScript chart by amCharts 3.21.15AUUIX PGKCX
       Timeline  
Ab Select Equity 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ab Select Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Ab Select is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec21.52222.52323.524
Pgim Jennison Technology 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Pgim Jennison Technology are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Pgim Jennison is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec24.52525.52626.52727.5

Ab Select and Pgim Jennison Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.88-1.41-0.94-0.47-0.03140.380.851.321.79 0.050.100.150.200.250.30
JavaScript chart by amCharts 3.21.15AUUIX PGKCX
       Returns  

Pair Trading with Ab Select and Pgim Jennison

The main advantage of trading using opposite Ab Select and Pgim Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select 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.
The idea behind Ab Select Equity and Pgim Jennison Technology 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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