Correlation Between Prudential Jennison and Ab Value
Can any of the company-specific risk be diversified away by investing in both Prudential Jennison and Ab Value 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 Prudential Jennison and Ab Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Jennison Focused and Ab Value Fund, you can compare the effects of market volatilities on Prudential Jennison and Ab Value 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 Prudential Jennison with a short position of Ab Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and Ab Value.
Diversification Opportunities for Prudential Jennison and Ab Value
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Prudential and ABVCX is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Focused and Ab Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Value Fund and Prudential 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 Prudential Jennison Focused are associated (or correlated) with Ab Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Value Fund has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and Ab Value go up and down completely randomly.
Pair Corralation between Prudential Jennison and Ab Value
Assuming the 90 days horizon Prudential Jennison Focused is expected to generate 1.66 times more return on investment than Ab Value. However, Prudential Jennison is 1.66 times more volatile than Ab Value Fund. It trades about 0.12 of its potential returns per unit of risk. Ab Value Fund is currently generating about 0.11 per unit of risk. If you would invest 1,941 in Prudential Jennison Focused on September 14, 2024 and sell it today you would earn a total of 824.00 from holding Prudential Jennison Focused or generate 42.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Jennison Focused vs. Ab Value Fund
Performance |
| Timeline |
| Prudential Jennison |
| Ab Value Fund |
Prudential Jennison and Ab Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Jennison and Ab Value
The main advantage of trading using opposite Prudential Jennison and Ab Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Jennison position performs unexpectedly, Ab Value 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 Ab Value will offset losses from the drop in Ab Value's long position.| Prudential Jennison vs. Commodities Strategy Fund | Prudential Jennison vs. Ab Value Fund | Prudential Jennison vs. Versatile Bond Portfolio | Prudential Jennison vs. T Rowe Price |
| Ab Value vs. Putnam Convertible Incm Gwth | Ab Value vs. Fidelity Sai Convertible | Ab Value vs. Calamos Dynamic Convertible | Ab Value vs. Advent Claymore Convertible |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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