Correlation Between James Balanced and Pgim Jennison

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

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

Diversification Opportunities for James Balanced and Pgim Jennison

0.55

Correlation Coefficient

James Balanced  Pgim Jennison

Very weak diversification

The 3 months correlation between James and Pgim is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding James Balanced Golden 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 James Balanced 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 James Balanced Golden 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 James Balanced i.e., James Balanced and Pgim Jennison go up and down completely randomly.

Pair Corralation between James Balanced and Pgim Jennison

Assuming the 90 days horizon James Balanced Golden is expected to under-perform the Pgim Jennison. But the mutual fund apears to be less risky and, when comparing its historical volatility, James Balanced Golden is 2.3 times less risky than Pgim Jennison. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Pgim Jennison Technology is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,641  in Pgim Jennison Technology on September 13, 2024 and sell it today you would earn a total of  65.00  from holding Pgim Jennison Technology or generate 2.46% return on investment over 90 days.

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

James Balanced Golden  vs.  Pgim Jennison Technology

James Balanced Golden

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days James Balanced Golden has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, James Balanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 James Balanced and Pgim Jennison

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