Correlation Between Franklin Small and Pgim Jennison
Can any of the company-specific risk be diversified away by investing in both Franklin Small 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 Franklin Small and Pgim Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Small Cap and Pgim Jennison Diversified, you can compare the effects of market volatilities on Franklin Small 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 Franklin Small with a short position of Pgim Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Small and Pgim Jennison.
Diversification Opportunities for Franklin Small and Pgim Jennison
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Pgim is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Small Cap 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 Franklin Small 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 Franklin Small Cap 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 Franklin Small i.e., Franklin Small and Pgim Jennison go up and down completely randomly.
Pair Corralation between Franklin Small and Pgim Jennison
Assuming the 90 days horizon Franklin Small is expected to generate 3.97 times less return on investment than Pgim Jennison. In addition to that, Franklin Small is 1.01 times more volatile than Pgim Jennison Diversified. It trades about 0.02 of its total potential returns per unit of risk. Pgim Jennison Diversified is currently generating about 0.09 per unit of volatility. If you would invest 1,139 in Pgim Jennison Diversified on September 30, 2024 and sell it today you would earn a total of 813.00 from holding Pgim Jennison Diversified or generate 71.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Small Cap vs. Pgim Jennison Diversified
Performance |
| Timeline |
| Franklin Small Cap |
| Pgim Jennison Diversified |
Franklin Small and Pgim Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Small and Pgim Jennison
The main advantage of trading using opposite Franklin Small and Pgim Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Small 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.| Franklin Small vs. Fidelity Managed Retirement | Franklin Small vs. Strategic Allocation Moderate | Franklin Small vs. Sa Worldwide Moderate | Franklin Small vs. Jpmorgan Smartretirement 2035 |
| Pgim Jennison vs. Rbb Fund | Pgim Jennison vs. Balanced Fund Investor | Pgim Jennison vs. Artisan Thematic Fund | Pgim Jennison vs. T Rowe Price |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |