Correlation Between Growth Portfolio and Pgim Jennison
Can any of the company-specific risk be diversified away by investing in both Growth Portfolio 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 Growth Portfolio and Pgim Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Portfolio Class and Pgim Jennison Technology, you can compare the effects of market volatilities on Growth Portfolio 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 Growth Portfolio with a short position of Pgim Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Portfolio and Pgim Jennison.
Diversification Opportunities for Growth Portfolio and Pgim Jennison
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Growth and PGIM is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Growth Portfolio Class and Pgim Jennison Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Jennison Technology and Growth Portfolio 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 Growth Portfolio Class 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 Technology has no effect on the direction of Growth Portfolio i.e., Growth Portfolio and Pgim Jennison go up and down completely randomly.
Pair Corralation between Growth Portfolio and Pgim Jennison
Assuming the 90 days horizon Growth Portfolio Class is expected to generate 1.08 times more return on investment than Pgim Jennison. However, Growth Portfolio is 1.08 times more volatile than Pgim Jennison Technology. It trades about 0.09 of its potential returns per unit of risk. Pgim Jennison Technology is currently generating about 0.09 per unit of risk. If you would invest 2,167 in Growth Portfolio Class on December 1, 2024 and sell it today you would earn a total of 2,281 from holding Growth Portfolio Class or generate 105.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Growth Portfolio Class vs. Pgim Jennison Technology
Performance |
| Timeline |
| Growth Portfolio Class |
| Pgim Jennison Technology |
Growth Portfolio and Pgim Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Portfolio and Pgim Jennison
The main advantage of trading using opposite Growth Portfolio and Pgim Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Portfolio 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.| Growth Portfolio vs. Emerging Markets Equity | Growth Portfolio vs. Global Fixed Income | Growth Portfolio vs. Global Fixed Income | Growth Portfolio vs. Global Fixed Income |
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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 Directory module to find actively traded commodities issued by global exchanges.
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