Correlation Between Prudential Jennison and Thornburg Value
Can any of the company-specific risk be diversified away by investing in both Prudential Jennison and Thornburg Value 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 Prudential Jennison and Thornburg Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Jennison Financial and Thornburg Value Fund, you can compare the effects of market volatilities on Prudential Jennison and Thornburg Value 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 Prudential Jennison with a short position of Thornburg Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and Thornburg Value.
Diversification Opportunities for Prudential Jennison and Thornburg Value
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Prudential and Thornburg is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Financial and Thornburg Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Value and Prudential Jennison 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 Prudential Jennison Financial are associated (or correlated) with Thornburg Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Value has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and Thornburg Value go up and down completely randomly.
Pair Corralation between Prudential Jennison and Thornburg Value
Assuming the 90 days horizon Prudential Jennison Financial is expected to generate 0.88 times more return on investment than Thornburg Value. However, Prudential Jennison Financial is 1.14 times less risky than Thornburg Value. It trades about 0.16 of its potential returns per unit of risk. Thornburg Value Fund is currently generating about 0.1 per unit of risk. If you would invest 1,711 in Prudential Jennison Financial on August 29, 2024 and sell it today you would earn a total of 1,043 from holding Prudential Jennison Financial or generate 60.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Jennison Financial vs. Thornburg Value Fund
Performance |
| Timeline |
| Prudential Jennison |
| Thornburg Value |
Prudential Jennison and Thornburg Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Jennison and Thornburg Value
The main advantage of trading using opposite Prudential Jennison and Thornburg Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Jennison position performs unexpectedly, Thornburg Value 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 Thornburg Value will offset losses from the drop in Thornburg Value's long position.| Prudential Jennison vs. HUMANA INC | Prudential Jennison vs. Aquagold International | Prudential Jennison vs. Barloworld Ltd ADR | Prudential Jennison vs. Morningstar Unconstrained Allocation |
| Thornburg Value vs. Nebraska Municipal Fund | Thornburg Value vs. Ambrus Core Bond | Thornburg Value vs. Prudential Jennison Financial | Thornburg Value vs. Transamerica Funds |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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