Correlation Between Pgim Jennison and Prudential Muni
Can any of the company-specific risk be diversified away by investing in both Pgim Jennison and Prudential Muni 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 Muni 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 Muni High, you can compare the effects of market volatilities on Pgim Jennison and Prudential Muni 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 Muni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pgim Jennison and Prudential Muni.
Diversification Opportunities for Pgim Jennison and Prudential Muni
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pgim and Prudential is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Pgim Jennison Technology and Prudential Muni High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Muni High 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 Muni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Muni High has no effect on the direction of Pgim Jennison i.e., Pgim Jennison and Prudential Muni go up and down completely randomly.
Pair Corralation between Pgim Jennison and Prudential Muni
Assuming the 90 days horizon Pgim Jennison Technology is expected to generate 4.39 times more return on investment than Prudential Muni. However, Pgim Jennison is 4.39 times more volatile than Prudential Muni High. It trades about 0.1 of its potential returns per unit of risk. Prudential Muni High is currently generating about 0.02 per unit of risk. If you would invest 2,751 in Pgim Jennison Technology on October 21, 2024 and sell it today you would earn a total of 64.00 from holding Pgim Jennison Technology or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pgim Jennison Technology vs. Prudential Muni High
Performance |
| Timeline |
| Pgim Jennison Technology |
| Prudential Muni High |
Pgim Jennison and Prudential Muni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pgim Jennison and Prudential Muni
The main advantage of trading using opposite Pgim Jennison and Prudential Muni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pgim Jennison position performs unexpectedly, Prudential Muni 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 Muni will offset losses from the drop in Prudential Muni's long position.| Pgim Jennison vs. Veea Inc | Pgim Jennison vs. VivoPower International PLC | Pgim Jennison vs. Exodus Movement, | Pgim Jennison vs. Prudential Jennison International |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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