Correlation Between Jhancock Global and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both Jhancock Global 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 Jhancock Global and Prudential Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jhancock Global Equity and Prudential Jennison International, you can compare the effects of market volatilities on Jhancock Global 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 Jhancock Global with a short position of Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Global and Prudential Jennison.
Diversification Opportunities for Jhancock Global and Prudential Jennison
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Jhancock and Prudential is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Global Equity and Prudential Jennison Internatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison and Jhancock Global 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 Jhancock Global Equity 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 Jhancock Global i.e., Jhancock Global and Prudential Jennison go up and down completely randomly.
Pair Corralation between Jhancock Global and Prudential Jennison
Assuming the 90 days horizon Jhancock Global Equity is expected to generate 0.58 times more return on investment than Prudential Jennison. However, Jhancock Global Equity is 1.71 times less risky than Prudential Jennison. It trades about 0.09 of its potential returns per unit of risk. Prudential Jennison International is currently generating about 0.04 per unit of risk. If you would invest 1,189 in Jhancock Global Equity on September 14, 2024 and sell it today you would earn a total of 174.00 from holding Jhancock Global Equity or generate 14.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jhancock Global Equity vs. Prudential Jennison Internatio
Performance |
| Timeline |
| Jhancock Global Equity |
| Prudential Jennison |
Jhancock Global and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Global and Prudential Jennison
The main advantage of trading using opposite Jhancock Global and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Global 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.| Jhancock Global vs. Morningstar Global Income | Jhancock Global vs. Franklin Mutual Global | Jhancock Global vs. Ab Global Real |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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