Correlation Between American Funds and Pgim Jennison
Can any of the company-specific risk be diversified away by investing in both American Funds 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 American Funds and Pgim Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds 2010 and Pgim Jennison Technology, you can compare the effects of market volatilities on American Funds 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 American Funds with a short position of Pgim Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Pgim Jennison.
Diversification Opportunities for American Funds and Pgim Jennison
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between American and Pgim is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding American Funds 2010 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 American Funds 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 American Funds 2010 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 American Funds i.e., American Funds and Pgim Jennison go up and down completely randomly.
Pair Corralation between American Funds and Pgim Jennison
Assuming the 90 days horizon American Funds is expected to generate 3.92 times less return on investment than Pgim Jennison. But when comparing it to its historical volatility, American Funds 2010 is 2.91 times less risky than Pgim Jennison. It trades about 0.08 of its potential returns per unit of risk. Pgim Jennison Technology is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,180 in Pgim Jennison Technology on September 12, 2024 and sell it today you would earn a total of 1,469 from holding Pgim Jennison Technology or generate 124.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds 2010 vs. Pgim Jennison Technology
Performance |
| Timeline |
| American Funds 2010 |
| Pgim Jennison Technology |
American Funds and Pgim Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Pgim Jennison
The main advantage of trading using opposite American Funds and Pgim Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds 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.| American Funds vs. Transamerica Cleartrack Retirement | American Funds vs. Deutsche Multi Asset Moderate | American Funds vs. Jpmorgan Smartretirement 2035 | American Funds vs. Fidelity Managed Retirement |
| Pgim Jennison vs. California High Yield Municipal | Pgim Jennison vs. Gamco Global Telecommunications | Pgim Jennison vs. Pace Municipal Fixed | Pgim Jennison vs. Dws Government Money |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |