Correlation Between Pgim Jennison and Prudential Qma

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

By analyzing existing cross correlation between Pgim Jennison Rising and Prudential Qma Large Cap, you can compare the effects of market volatilities on Pgim Jennison and Prudential Qma 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 Prudential Qma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pgim Jennison and Prudential Qma.

Diversification Opportunities for Pgim Jennison and Prudential Qma

0.79

Correlation Coefficient

Pgim Jennison  Prudential Qma

Poor diversification

The 3 months correlation between Pgim and Prudential is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Pgim Jennison Rising and Prudential Qma Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Qma Large 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 Rising are associated (or correlated) with Prudential Qma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Qma Large has no effect on the direction of Pgim Jennison i.e., Pgim Jennison and Prudential Qma go up and down completely randomly.

Pair Corralation between Pgim Jennison and Prudential Qma

Assuming the 90 days horizon Pgim Jennison Rising is expected to under-perform the Prudential Qma. In addition to that, Pgim Jennison is 1.23 times more volatile than Prudential Qma Large Cap. It trades about -0.05 of its total potential returns per unit of risk. Prudential Qma Large Cap is currently generating about -0.01 per unit of volatility. If you would invest  2,277  in Prudential Qma Large Cap on September 29, 2024 and sell it today you would lose (42.00) from holding Prudential Qma Large Cap or give up 1.84% of portfolio value over 90 days.

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

Pgim Jennison Rising  vs.  Prudential Qma Large Cap

Pgim Jennison Rising

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pgim Jennison Rising has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Prudential Qma Large

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prudential Qma Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Prudential Qma 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 Prudential Qma

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

The idea behind Pgim Jennison Rising and Prudential Qma Large Cap 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.