Correlation Between Moderate Duration and Jennison Natural
Can any of the company-specific risk be diversified away by investing in both Moderate Duration and Jennison Natural 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 Moderate Duration and Jennison Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moderate Duration Fund and Jennison Natural Resources, you can compare the effects of market volatilities on Moderate Duration and Jennison Natural 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 Moderate Duration with a short position of Jennison Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moderate Duration and Jennison Natural.
Diversification Opportunities for Moderate Duration and Jennison Natural
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Moderate and Jennison is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Moderate Duration Fund and Jennison Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jennison Natural Res and Moderate Duration 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 Moderate Duration Fund are associated (or correlated) with Jennison Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jennison Natural Res has no effect on the direction of Moderate Duration i.e., Moderate Duration and Jennison Natural go up and down completely randomly.
Pair Corralation between Moderate Duration and Jennison Natural
Assuming the 90 days horizon Moderate Duration is expected to generate 5.12 times less return on investment than Jennison Natural. But when comparing it to its historical volatility, Moderate Duration Fund is 5.37 times less risky than Jennison Natural. It trades about 0.08 of its potential returns per unit of risk. Jennison Natural Resources is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4,170 in Jennison Natural Resources on August 30, 2024 and sell it today you would earn a total of 66.00 from holding Jennison Natural Resources or generate 1.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moderate Duration Fund vs. Jennison Natural Resources
Performance |
| Timeline |
| Moderate Duration |
| Jennison Natural Res |
Moderate Duration and Jennison Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moderate Duration and Jennison Natural
The main advantage of trading using opposite Moderate Duration and Jennison Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderate Duration position performs unexpectedly, Jennison Natural 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 Jennison Natural will offset losses from the drop in Jennison Natural's long position.| Moderate Duration vs. Oklahoma Municipal Fund | Moderate Duration vs. Baird Strategic Municipal | Moderate Duration vs. Ab Impact Municipal | Moderate Duration vs. Nuveen Massachusetts Municipal |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |