Correlation Between Pgim Jennison and Biotechnology Fund
Can any of the company-specific risk be diversified away by investing in both Pgim Jennison and Biotechnology Fund 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 Biotechnology Fund 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 Biotechnology Fund Class, you can compare the effects of market volatilities on Pgim Jennison and Biotechnology Fund 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 Biotechnology Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pgim Jennison and Biotechnology Fund.
Diversification Opportunities for Pgim Jennison and Biotechnology Fund
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pgim and Biotechnology is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Pgim Jennison Technology and Biotechnology Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biotechnology Fund Class 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 Biotechnology Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biotechnology Fund Class has no effect on the direction of Pgim Jennison i.e., Pgim Jennison and Biotechnology Fund go up and down completely randomly.
Pair Corralation between Pgim Jennison and Biotechnology Fund
Assuming the 90 days horizon Pgim Jennison Technology is expected to generate 1.59 times more return on investment than Biotechnology Fund. However, Pgim Jennison is 1.59 times more volatile than Biotechnology Fund Class. It trades about 0.07 of its potential returns per unit of risk. Biotechnology Fund Class is currently generating about 0.06 per unit of risk. If you would invest 2,255 in Pgim Jennison Technology on September 3, 2024 and sell it today you would earn a total of 381.00 from holding Pgim Jennison Technology or generate 16.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pgim Jennison Technology vs. Biotechnology Fund Class
Performance |
| Timeline |
| Pgim Jennison Technology |
| Biotechnology Fund Class |
Pgim Jennison and Biotechnology Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pgim Jennison and Biotechnology Fund
The main advantage of trading using opposite Pgim Jennison and Biotechnology Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pgim Jennison position performs unexpectedly, Biotechnology Fund 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 Biotechnology Fund will offset losses from the drop in Biotechnology Fund's long position.| Pgim Jennison vs. Alphacentric Lifesci Healthcare | Pgim Jennison vs. Blackrock Health Sciences | Pgim Jennison vs. Invesco Global Health | Pgim Jennison vs. Tekla Healthcare Opportunities |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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