Correlation Between VHAI and Pgim Jennison
Can any of the company-specific risk be diversified away by investing in both VHAI 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 VHAI and Pgim Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VHAI and Pgim Jennison Technology, you can compare the effects of market volatilities on VHAI 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 VHAI with a short position of Pgim Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of VHAI and Pgim Jennison.
Diversification Opportunities for VHAI and Pgim Jennison
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between VHAI and Pgim is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding VHAI and Pgim Jennison Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Jennison Technology and VHAI 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 VHAI 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 Technology has no effect on the direction of VHAI i.e., VHAI and Pgim Jennison go up and down completely randomly.
Pair Corralation between VHAI and Pgim Jennison
Given the investment horizon of 90 days VHAI is expected to under-perform the Pgim Jennison. In addition to that, VHAI is 7.81 times more volatile than Pgim Jennison Technology. It trades about -0.17 of its total potential returns per unit of risk. Pgim Jennison Technology is currently generating about 0.09 per unit of volatility. If you would invest 1,707 in Pgim Jennison Technology on September 1, 2024 and sell it today you would earn a total of 1,116 from holding Pgim Jennison Technology or generate 65.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 52.01% |
| Values | Daily Returns |
VHAI vs. Pgim Jennison Technology
Performance |
| Timeline |
| VHAI |
| Pgim Jennison Technology |
VHAI and Pgim Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VHAI and Pgim Jennison
The main advantage of trading using opposite VHAI and Pgim Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VHAI 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 VHAI and Pgim Jennison Technology 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. Blackrock High Yield | Pgim Jennison vs. Mesirow Financial High | Pgim Jennison vs. Fidelity Capital Income | Pgim Jennison vs. Virtus High Yield |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |