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 The and Pgim Jennison Diversified, 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
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Pgim is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding American Funds The and Pgim Jennison Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Jennison Diversified 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 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 Diversified 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 2.24 times less return on investment than Pgim Jennison. But when comparing it to its historical volatility, American Funds The is 1.46 times less risky than Pgim Jennison. It trades about 0.12 of its potential returns per unit of risk. Pgim Jennison Diversified is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,154 in Pgim Jennison Diversified on September 13, 2024 and sell it today you would earn a total of 78.00 from holding Pgim Jennison Diversified or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds The vs. Pgim Jennison Diversified
Performance |
| Timeline |
| American Funds |
| Pgim Jennison Diversified |
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. Mid Cap Growth | American Funds vs. Needham Aggressive Growth | American Funds vs. Qs Defensive Growth | American Funds vs. L Abbett Growth |
| Pgim Jennison vs. Prudential Jennison International | Pgim Jennison vs. Prudential Jennison International | Pgim Jennison vs. Pgim Jennison International | Pgim Jennison vs. Pgim Jennison International |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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