Correlation Between Pgim Jennison and Payden High
Can any of the company-specific risk be diversified away by investing in both Pgim Jennison and Payden High 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 Jennison and Payden High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pgim Jennison Diversified and Payden High Income, you can compare the effects of market volatilities on Pgim Jennison and Payden High 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 Jennison with a short position of Payden High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pgim Jennison and Payden High.
Diversification Opportunities for Pgim Jennison and Payden High
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pgim and Payden is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Pgim Jennison Diversified and Payden High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden High Income and Pgim 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 Pgim Jennison Diversified are associated (or correlated) with Payden High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden High Income has no effect on the direction of Pgim Jennison i.e., Pgim Jennison and Payden High go up and down completely randomly.
Pair Corralation between Pgim Jennison and Payden High
Assuming the 90 days horizon Pgim Jennison Diversified is expected to generate 4.35 times more return on investment than Payden High. However, Pgim Jennison is 4.35 times more volatile than Payden High Income. It trades about 0.11 of its potential returns per unit of risk. Payden High Income is currently generating about 0.15 per unit of risk. If you would invest 1,195 in Pgim Jennison Diversified on September 2, 2024 and sell it today you would earn a total of 955.00 from holding Pgim Jennison Diversified or generate 79.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pgim Jennison Diversified vs. Payden High Income
Performance |
| Timeline |
| Pgim Jennison Diversified |
| Payden High Income |
Pgim Jennison and Payden High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pgim Jennison and Payden High
The main advantage of trading using opposite Pgim Jennison and Payden High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pgim Jennison position performs unexpectedly, Payden High 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 Payden High will offset losses from the drop in Payden High's long position.| Pgim Jennison vs. Prudential Jennison International | Pgim Jennison vs. Prudential Jennison International | Pgim Jennison vs. Pgim Jennison International | Pgim Jennison vs. Pgim Jennison International |
| Payden High vs. Payden Porate Bond | Payden High vs. Payden Absolute Return | Payden High vs. Payden Absolute Return | Payden High vs. Payden Emerging Markets |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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