Correlation Between Pgim Securitized and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both Pgim Securitized and Prudential 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 Pgim Securitized and Prudential Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pgim Securitized Credit and Prudential Jennison Equity, you can compare the effects of market volatilities on Pgim Securitized and Prudential 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 Pgim Securitized with a short position of Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pgim Securitized and Prudential Jennison.
Diversification Opportunities for Pgim Securitized and Prudential Jennison
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pgim and Prudential is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Pgim Securitized Credit and Prudential Jennison Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison and Pgim Securitized 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 Securitized Credit are associated (or correlated) with Prudential Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Jennison has no effect on the direction of Pgim Securitized i.e., Pgim Securitized and Prudential Jennison go up and down completely randomly.
Pair Corralation between Pgim Securitized and Prudential Jennison
Assuming the 90 days horizon Pgim Securitized is expected to generate 1.54 times less return on investment than Prudential Jennison. But when comparing it to its historical volatility, Pgim Securitized Credit is 8.13 times less risky than Prudential Jennison. It trades about 0.29 of its potential returns per unit of risk. Prudential Jennison Equity is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,416 in Prudential Jennison Equity on August 24, 2024 and sell it today you would earn a total of 363.00 from holding Prudential Jennison Equity or generate 25.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pgim Securitized Credit vs. Prudential Jennison Equity
Performance |
| Timeline |
| Pgim Securitized Credit |
| Prudential Jennison |
Pgim Securitized and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pgim Securitized and Prudential Jennison
The main advantage of trading using opposite Pgim Securitized and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pgim Securitized position performs unexpectedly, Prudential 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 Prudential Jennison will offset losses from the drop in Prudential Jennison's long position.| Pgim Securitized vs. Blackrock Strategic Income | Pgim Securitized vs. Blackrock Strategic Opps | Pgim Securitized vs. Blackrock Strategic Opps | Pgim Securitized vs. Jpmorgan Strategic Income |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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