Correlation Between American Funds and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both American Funds and Prudential 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 Prudential Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds The and Prudential Jennison Growth, you can compare the effects of market volatilities on American Funds and Prudential 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 Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Prudential Jennison.
Diversification Opportunities for American Funds and Prudential Jennison
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Prudential is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding American Funds The and Prudential Jennison Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison 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 The are associated (or correlated) with Prudential Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Jennison has no effect on the direction of American Funds i.e., American Funds and Prudential Jennison go up and down completely randomly.
Pair Corralation between American Funds and Prudential Jennison
Assuming the 90 days horizon American Funds is expected to generate 1.07 times less return on investment than Prudential Jennison. But when comparing it to its historical volatility, American Funds The is 1.08 times less risky than Prudential Jennison. It trades about 0.1 of its potential returns per unit of risk. Prudential Jennison Growth is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,335 in Prudential Jennison Growth on September 4, 2024 and sell it today you would earn a total of 3,376 from holding Prudential Jennison Growth or generate 77.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
American Funds The vs. Prudential Jennison Growth
Performance |
| Timeline |
| American Funds |
| Prudential Jennison |
American Funds and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Prudential Jennison
The main advantage of trading using opposite American Funds and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Prudential 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 Prudential Jennison will offset losses from the drop in Prudential Jennison's long position.| American Funds vs. Income Fund Of | American Funds vs. New World Fund | American Funds vs. American Mutual Fund | American Funds vs. American Mutual Fund |
| Prudential Jennison vs. Prudential Qma Stock | Prudential Jennison vs. Prudential Jennison Mid Cap | Prudential Jennison vs. Prudential Jennison Equity | Prudential Jennison vs. Prudential Qma Stock |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |