Correlation Between Aggressive Growth and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both Aggressive Growth 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 Aggressive Growth and Prudential Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aggressive Growth Allocation and Prudential Jennison Financial, you can compare the effects of market volatilities on Aggressive Growth 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 Aggressive Growth with a short position of Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aggressive Growth and Prudential Jennison.
Diversification Opportunities for Aggressive Growth and Prudential Jennison
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aggressive and Prudential is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Aggressive Growth Allocation and Prudential Jennison Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison and Aggressive Growth 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 Aggressive Growth Allocation 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 Aggressive Growth i.e., Aggressive Growth and Prudential Jennison go up and down completely randomly.
Pair Corralation between Aggressive Growth and Prudential Jennison
Assuming the 90 days horizon Aggressive Growth is expected to generate 2.67 times less return on investment than Prudential Jennison. But when comparing it to its historical volatility, Aggressive Growth Allocation is 1.62 times less risky than Prudential Jennison. It trades about 0.11 of its potential returns per unit of risk. Prudential Jennison Financial is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,155 in Prudential Jennison Financial on September 1, 2024 and sell it today you would earn a total of 598.00 from holding Prudential Jennison Financial or generate 27.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aggressive Growth Allocation vs. Prudential Jennison Financial
Performance |
| Timeline |
| Aggressive Growth |
| Prudential Jennison |
Aggressive Growth and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aggressive Growth and Prudential Jennison
The main advantage of trading using opposite Aggressive Growth and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aggressive Growth 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.| Aggressive Growth vs. Heartland Value Plus | Aggressive Growth vs. Columbia Small Cap | Aggressive Growth vs. Pace Smallmedium Value | Aggressive Growth vs. Mid Cap Value Profund |
| Prudential Jennison vs. Large Cap Growth Profund | Prudential Jennison vs. T Rowe Price | Prudential Jennison vs. Qs Large Cap | Prudential Jennison vs. Legg Mason Bw |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |