Correlation Between Pgim Jennison and Hotchkis Wiley

Can any of the company-specific risk be diversified away by investing in both Pgim Jennison and Hotchkis Wiley 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 Hotchkis Wiley 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 Hotchkis Wiley International, you can compare the effects of market volatilities on Pgim Jennison and Hotchkis Wiley 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 Hotchkis Wiley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pgim Jennison and Hotchkis Wiley.

Diversification Opportunities for Pgim Jennison and Hotchkis Wiley

-0.46

Correlation Coefficient

Pgim Jennison  Hotchkis Wiley

Very good diversification

The 3 months correlation between Pgim and Hotchkis is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Pgim Jennison Technology and Hotchkis Wiley International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotchkis Wiley Inter 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 Hotchkis Wiley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotchkis Wiley Inter has no effect on the direction of Pgim Jennison i.e., Pgim Jennison and Hotchkis Wiley go up and down completely randomly.

Pair Corralation between Pgim Jennison and Hotchkis Wiley

Assuming the 90 days horizon Pgim Jennison Technology is expected to generate 1.57 times more return on investment than Hotchkis Wiley. However, Pgim Jennison is 1.57 times more volatile than Hotchkis Wiley International. It trades about 0.29 of its potential returns per unit of risk. Hotchkis Wiley International is currently generating about 0.03 per unit of risk. If you would invest  2,492  in Pgim Jennison Technology on September 4, 2024 and sell it today you would earn a total of  192.00  from holding Pgim Jennison Technology or generate 7.7% return on investment over 90 days.

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

Pgim Jennison Technology  vs.  Hotchkis Wiley International

Pgim Jennison Technology

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pgim Jennison Technology are ranked lower than 15 (%) 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.

Hotchkis Wiley Inter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hotchkis Wiley International has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Hotchkis Wiley is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pgim Jennison and Hotchkis Wiley

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

The idea behind Pgim Jennison Technology and Hotchkis Wiley 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.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.