Correlation Between Tiaa-cref High-yield and Pgim Jennison
Can any of the company-specific risk be diversified away by investing in both Tiaa-cref High-yield 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 Tiaa-cref High-yield and Pgim Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tiaa Cref High Yield Fund and Pgim Jennison International, you can compare the effects of market volatilities on Tiaa-cref High-yield 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 Tiaa-cref High-yield with a short position of Pgim Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa-cref High-yield and Pgim Jennison.
Diversification Opportunities for Tiaa-cref High-yield and Pgim Jennison
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tiaa-cref and Pgim is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref High Yield Fund and Pgim Jennison International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Jennison Intern and Tiaa-cref High-yield 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 Tiaa Cref High Yield Fund 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 Intern has no effect on the direction of Tiaa-cref High-yield i.e., Tiaa-cref High-yield and Pgim Jennison go up and down completely randomly.
Pair Corralation between Tiaa-cref High-yield and Pgim Jennison
Assuming the 90 days horizon Tiaa-cref High-yield is expected to generate 1.17 times less return on investment than Pgim Jennison. But when comparing it to its historical volatility, Tiaa Cref High Yield Fund is 3.48 times less risky than Pgim Jennison. It trades about 0.12 of its potential returns per unit of risk. Pgim Jennison International is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,562 in Pgim Jennison International on September 1, 2024 and sell it today you would earn a total of 469.00 from holding Pgim Jennison International or generate 18.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Tiaa Cref High Yield Fund vs. Pgim Jennison International
Performance |
| Timeline |
| Tiaa-cref High-yield |
| Pgim Jennison Intern |
Tiaa-cref High-yield and Pgim Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tiaa-cref High-yield and Pgim Jennison
The main advantage of trading using opposite Tiaa-cref High-yield and Pgim Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tiaa-cref High-yield 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.The idea behind Tiaa Cref High Yield Fund and Pgim Jennison International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Pgim Jennison vs. Pgim Jennison International | Pgim Jennison vs. Prudential Short Duration | Pgim Jennison vs. Prudential Emerging Markets | Pgim Jennison vs. Prudential Floating Rate |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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