Correlation Between Pgim Jennison and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both Pgim Jennison 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 Pgim Jennison and Prudential Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pgim Jennison Technology and Prudential Jennison Growth, you can compare the effects of market volatilities on Pgim Jennison 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 Pgim Jennison with a short position of Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pgim Jennison and Prudential Jennison.
Diversification Opportunities for Pgim Jennison and Prudential Jennison
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pgim and Prudential is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Pgim Jennison Technology and Prudential Jennison Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison and Pgim 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 Pgim Jennison Technology 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 Pgim Jennison i.e., Pgim Jennison and Prudential Jennison go up and down completely randomly.
Pair Corralation between Pgim Jennison and Prudential Jennison
Assuming the 90 days horizon Pgim Jennison Technology is expected to generate 1.34 times more return on investment than Prudential Jennison. However, Pgim Jennison is 1.34 times more volatile than Prudential Jennison Growth. It trades about 0.09 of its potential returns per unit of risk. Prudential Jennison Growth is currently generating about 0.08 per unit of risk. If you would invest 1,678 in Pgim Jennison Technology on August 31, 2024 and sell it today you would earn a total of 1,068 from holding Pgim Jennison Technology or generate 63.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pgim Jennison Technology vs. Prudential Jennison Growth
Performance |
| Timeline |
| Pgim Jennison Technology |
| Prudential Jennison |
Pgim Jennison and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pgim Jennison and Prudential Jennison
The main advantage of trading using opposite Pgim Jennison and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pgim Jennison 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.| Pgim Jennison vs. Multimanager Lifestyle Moderate | Pgim Jennison vs. Jp Morgan Smartretirement | Pgim Jennison vs. Blackrock Moderate Prepared | Pgim Jennison vs. Transamerica Cleartrack Retirement |
| Prudential Jennison vs. Transamerica Funds | Prudential Jennison vs. Federated Ohio Municipal | Prudential Jennison vs. Franklin High Yield | Prudential Jennison vs. Oklahoma Municipal Fund |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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