Correlation Between Pgim Jennison and Optimum Small
Can any of the company-specific risk be diversified away by investing in both Pgim Jennison and Optimum Small 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 Optimum Small 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 Optimum Small Mid Cap, you can compare the effects of market volatilities on Pgim Jennison and Optimum Small 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 Optimum Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pgim Jennison and Optimum Small.
Diversification Opportunities for Pgim Jennison and Optimum Small
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pgim and Optimum is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Pgim Jennison Technology and Optimum Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optimum Small Mid 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 Optimum Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optimum Small Mid has no effect on the direction of Pgim Jennison i.e., Pgim Jennison and Optimum Small go up and down completely randomly.
Pair Corralation between Pgim Jennison and Optimum Small
Assuming the 90 days horizon Pgim Jennison is expected to generate 1.92 times less return on investment than Optimum Small. But when comparing it to its historical volatility, Pgim Jennison Technology is 1.03 times less risky than Optimum Small. It trades about 0.12 of its potential returns per unit of risk. Optimum Small Mid Cap is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,446 in Optimum Small Mid Cap on August 29, 2024 and sell it today you would earn a total of 102.00 from holding Optimum Small Mid Cap or generate 7.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pgim Jennison Technology vs. Optimum Small Mid Cap
Performance |
| Timeline |
| Pgim Jennison Technology |
| Optimum Small Mid |
Pgim Jennison and Optimum Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pgim Jennison and Optimum Small
The main advantage of trading using opposite Pgim Jennison and Optimum Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pgim Jennison position performs unexpectedly, Optimum Small 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 Optimum Small will offset losses from the drop in Optimum Small's long position.| Pgim Jennison vs. Janus Global Technology | Pgim Jennison vs. Allianzgi Technology Fund | Pgim Jennison vs. Hennessy Technology Fund | Pgim Jennison vs. Allianzgi Technology Fund |
| Optimum Small vs. Pgim Jennison Technology | Optimum Small vs. Dreyfus Technology Growth | Optimum Small vs. Invesco Technology Fund | Optimum Small vs. Mfs Technology 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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