Correlation Between Highland Long/short and Pgim Jennison
Can any of the company-specific risk be diversified away by investing in both Highland Long/short 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 Highland Long/short and Pgim Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highland Longshort Healthcare and Pgim Jennison Diversified, you can compare the effects of market volatilities on Highland Long/short 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 Highland Long/short with a short position of Pgim Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Long/short and Pgim Jennison.
Diversification Opportunities for Highland Long/short and Pgim Jennison
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Highland and Pgim is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Highland Longshort Healthcare 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 Highland Long/short 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 Highland Longshort Healthcare 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 Highland Long/short i.e., Highland Long/short and Pgim Jennison go up and down completely randomly.
Pair Corralation between Highland Long/short and Pgim Jennison
Assuming the 90 days horizon Highland Long/short is expected to generate 31.65 times less return on investment than Pgim Jennison. But when comparing it to its historical volatility, Highland Longshort Healthcare is 4.13 times less risky than Pgim Jennison. It trades about 0.04 of its potential returns per unit of risk. Pgim Jennison Diversified is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,043 in Pgim Jennison Diversified on September 4, 2024 and sell it today you would earn a total of 128.00 from holding Pgim Jennison Diversified or generate 6.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Highland Longshort Healthcare vs. Pgim Jennison Diversified
Performance |
| Timeline |
| Highland Long/short |
| Pgim Jennison Diversified |
Highland Long/short and Pgim Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Long/short and Pgim Jennison
The main advantage of trading using opposite Highland Long/short and Pgim Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Long/short 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.| Highland Long/short vs. Angel Oak Financial | Highland Long/short vs. Blrc Sgy Mnp | Highland Long/short vs. Legg Mason Partners | Highland Long/short vs. Federated Pennsylvania Municipal |
| 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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