Correlation Between Sterling Capital and Pgim Jennison
Can any of the company-specific risk be diversified away by investing in both Sterling Capital 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 Sterling Capital and Pgim Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Behavioral and Pgim Jennison Diversified, you can compare the effects of market volatilities on Sterling Capital 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 Sterling Capital with a short position of Pgim Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Pgim Jennison.
Diversification Opportunities for Sterling Capital and Pgim Jennison
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sterling and Pgim is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Behavioral 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 Sterling Capital 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 Sterling Capital Behavioral 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 Sterling Capital i.e., Sterling Capital and Pgim Jennison go up and down completely randomly.
Pair Corralation between Sterling Capital and Pgim Jennison
Assuming the 90 days horizon Sterling Capital Behavioral is expected to under-perform the Pgim Jennison. In addition to that, Sterling Capital is 1.71 times more volatile than Pgim Jennison Diversified. It trades about -0.22 of its total potential returns per unit of risk. Pgim Jennison Diversified is currently generating about 0.18 per unit of volatility. If you would invest 2,154 in Pgim Jennison Diversified on September 13, 2024 and sell it today you would earn a total of 78.00 from holding Pgim Jennison Diversified or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sterling Capital Behavioral vs. Pgim Jennison Diversified
Performance |
| Timeline |
| Sterling Capital Beh |
| Pgim Jennison Diversified |
Sterling Capital and Pgim Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Pgim Jennison
The main advantage of trading using opposite Sterling Capital and Pgim Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital 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.| Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral |
| Pgim Jennison vs. Prudential Jennison International | Pgim Jennison vs. Prudential Jennison International | Pgim Jennison vs. Pgim Jennison International | Pgim Jennison vs. Pgim 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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