Correlation Between Pgim Jennison and Fidelity Advisor

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

By analyzing existing cross correlation between Pgim Jennison Technology and Fidelity Advisor Energy, you can compare the effects of market volatilities on Pgim Jennison and Fidelity Advisor 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 Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pgim Jennison and Fidelity Advisor.

Diversification Opportunities for Pgim Jennison and Fidelity Advisor

0.16

Correlation Coefficient

Pgim Jennison  Fidelity Advisor

Average diversification

The 3 months correlation between Pgim and Fidelity is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Pgim Jennison Technology and Fidelity Advisor Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Energy 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 Technology are associated (or correlated) with Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Energy has no effect on the direction of Pgim Jennison i.e., Pgim Jennison and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Pgim Jennison and Fidelity Advisor

Assuming the 90 days horizon Pgim Jennison Technology is expected to generate 1.67 times more return on investment than Fidelity Advisor. However, Pgim Jennison is 1.67 times more volatile than Fidelity Advisor Energy. It trades about -0.09 of its potential returns per unit of risk. Fidelity Advisor Energy is currently generating about -0.68 per unit of risk. If you would invest  2,645  in Pgim Jennison Technology on September 22, 2024 and sell it today you would lose (85.00) from holding Pgim Jennison Technology or give up 3.21% of portfolio value over 90 days.

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

Pgim Jennison Technology  vs.  Fidelity Advisor Energy

Pgim Jennison Technology

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pgim Jennison Technology are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Pgim Jennison may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Fidelity Advisor Energy

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Pgim Jennison and Fidelity Advisor

The main advantage of trading using opposite Pgim Jennison and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pgim Jennison position performs unexpectedly, Fidelity Advisor 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 Fidelity Advisor will offset losses from the drop in Fidelity Advisor's long position.

The idea behind Pgim Jennison Technology and Fidelity Advisor Energy 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.