Correlation Between Pgim Jennison and American Beacon
Can any of the company-specific risk be diversified away by investing in both Pgim Jennison and American Beacon 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 American Beacon 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 American Beacon Shapiro, you can compare the effects of market volatilities on Pgim Jennison and American Beacon 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 American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pgim Jennison and American Beacon.
Diversification Opportunities for Pgim Jennison and American Beacon
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pgim and American is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Pgim Jennison Diversified and American Beacon Shapiro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Shapiro 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 American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Shapiro has no effect on the direction of Pgim Jennison i.e., Pgim Jennison and American Beacon go up and down completely randomly.
Pair Corralation between Pgim Jennison and American Beacon
Assuming the 90 days horizon Pgim Jennison Diversified is expected to generate 1.29 times more return on investment than American Beacon. However, Pgim Jennison is 1.29 times more volatile than American Beacon Shapiro. It trades about 0.14 of its potential returns per unit of risk. American Beacon Shapiro is currently generating about 0.0 per unit of risk. If you would invest 2,106 in Pgim Jennison Diversified on September 13, 2024 and sell it today you would earn a total of 126.00 from holding Pgim Jennison Diversified or generate 5.98% 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. American Beacon Shapiro
Performance |
| Timeline |
| Pgim Jennison Diversified |
| American Beacon Shapiro |
Pgim Jennison and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pgim Jennison and American Beacon
The main advantage of trading using opposite Pgim Jennison and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pgim Jennison position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon'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 |
| American Beacon vs. Nasdaq 100 Index Fund | American Beacon vs. Qs Growth Fund | American Beacon vs. L Abbett Fundamental | American Beacon vs. T Rowe Price |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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