Correlation Between Ab Small and Pgim Jennison
Can any of the company-specific risk be diversified away by investing in both Ab Small and Pgim 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 Ab Small and Pgim Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Small Cap and Pgim Jennison Diversified, you can compare the effects of market volatilities on Ab Small and Pgim 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 Ab Small with a short position of Pgim Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Small and Pgim Jennison.
Diversification Opportunities for Ab Small and Pgim Jennison
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between QUAZX and Pgim is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap and Pgim Jennison Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Jennison Diversified and Ab Small 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 Ab Small Cap are associated (or correlated) with Pgim Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pgim Jennison Diversified has no effect on the direction of Ab Small i.e., Ab Small and Pgim Jennison go up and down completely randomly.
Pair Corralation between Ab Small and Pgim Jennison
Assuming the 90 days horizon Ab Small Cap is expected to generate 0.49 times more return on investment than Pgim Jennison. However, Ab Small Cap is 2.04 times less risky than Pgim Jennison. It trades about -0.22 of its potential returns per unit of risk. Pgim Jennison Diversified is currently generating about -0.15 per unit of risk. If you would invest 7,995 in Ab Small Cap on September 30, 2024 and sell it today you would lose (491.00) from holding Ab Small Cap or give up 6.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Small Cap vs. Pgim Jennison Diversified
Performance |
| Timeline |
| Ab Small Cap |
| Pgim Jennison Diversified |
Ab Small and Pgim Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Small and Pgim Jennison
The main advantage of trading using opposite Ab Small and Pgim Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Small position performs unexpectedly, Pgim 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 Pgim Jennison will offset losses from the drop in Pgim Jennison's long position.| Ab Small vs. Strategic Advisers Income | Ab Small vs. Pace High Yield | Ab Small vs. California High Yield Municipal | Ab Small vs. Virtus High Yield |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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