Correlation Between Europac Gold and Pgim Jennison

Can any of the company-specific risk be diversified away by investing in both Europac Gold 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 Europac Gold and Pgim Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Europac Gold Fund and Pgim Jennison Technology, you can compare the effects of market volatilities on Europac Gold 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 Europac Gold with a short position of Pgim Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europac Gold and Pgim Jennison.

Diversification Opportunities for Europac Gold and Pgim Jennison

-0.13

Correlation Coefficient

Europac Gold  Pgim Jennison

Good diversification

The 3 months correlation between Europac and Pgim is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Europac Gold Fund 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 Europac Gold 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 Europac Gold 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 Technology has no effect on the direction of Europac Gold i.e., Europac Gold and Pgim Jennison go up and down completely randomly.

Pair Corralation between Europac Gold and Pgim Jennison

Assuming the 90 days horizon Europac Gold Fund is expected to under-perform the Pgim Jennison. In addition to that, Europac Gold is 1.67 times more volatile than Pgim Jennison Technology. It trades about -0.06 of its total potential returns per unit of risk. Pgim Jennison Technology is currently generating about 0.16 per unit of volatility. If you would invest  2,396  in Pgim Jennison Technology on September 13, 2024 and sell it today you would earn a total of  310.00  from holding Pgim Jennison Technology or generate 12.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Europac Gold Fund  vs.  Pgim Jennison Technology

Europac Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Europac Gold Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pgim Jennison Technology

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pgim Jennison Technology are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Pgim Jennison showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Europac Gold and Pgim Jennison

The main advantage of trading using opposite Europac Gold and Pgim Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europac Gold 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 Europac Gold Fund 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.

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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.