Correlation Between NYSE Composite and Pgim Jennison
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Pgim Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Pgim Jennison Rising, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Pgim Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Pgim Jennison.
Diversification Opportunities for NYSE Composite and Pgim Jennison
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Pgim is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Pgim Jennison Rising in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Jennison Rising and NYSE Composite 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 NYSE Composite 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 Rising has no effect on the direction of NYSE Composite i.e., NYSE Composite and Pgim Jennison go up and down completely randomly.
Pair Corralation between NYSE Composite and Pgim Jennison
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.26 times less return on investment than Pgim Jennison. But when comparing it to its historical volatility, NYSE Composite is 1.14 times less risky than Pgim Jennison. It trades about 0.32 of its potential returns per unit of risk. Pgim Jennison Rising is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 1,675 in Pgim Jennison Rising on November 3, 2024 and sell it today you would earn a total of 100.00 from holding Pgim Jennison Rising or generate 5.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Pgim Jennison Rising
Performance |
| Timeline |
NYSE Composite and Pgim Jennison Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Pgim Jennison Rising
Pair trading matchups for Pgim Jennison
Pair Trading with NYSE Composite and Pgim Jennison
The main advantage of trading using opposite NYSE Composite and Pgim Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Arrow Electronics | NYSE Composite vs. Cirmaker Technology | NYSE Composite vs. Zhihu Inc ADR | NYSE Composite vs. Weibo Corp |
| Pgim Jennison vs. Virtus Convertible | Pgim Jennison vs. Lord Abbett Convertible | Pgim Jennison vs. Allianzgi Convertible Income | Pgim Jennison vs. Calamos Dynamic Convertible |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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