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 Diversified and Fidelity Advisor Balanced, 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

0.79

Correlation Coefficient

Pgim Jennison  Fidelity Advisor

Poor diversification

The 3 months correlation between Pgim and Fidelity is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Pgim Jennison Diversified and Fidelity Advisor Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Balanced 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 Diversified 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 Balanced 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 Diversified is expected to under-perform the Fidelity Advisor. In addition to that, Pgim Jennison is 2.91 times more volatile than Fidelity Advisor Balanced. It trades about -0.03 of its total potential returns per unit of risk. Fidelity Advisor Balanced is currently generating about 0.03 per unit of volatility. If you would invest  2,982  in Fidelity Advisor Balanced on September 29, 2024 and sell it today you would earn a total of  25.00  from holding Fidelity Advisor Balanced or generate 0.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	71.43%
Values	Daily Returns

Pgim Jennison Diversified  vs.  Fidelity Advisor Balanced

Pgim Jennison Diversified

Risk-Adjusted Performance

0 of 100

Very Weak

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

Fidelity Advisor Balanced

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Balanced are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fidelity Advisor 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 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 Diversified and Fidelity Advisor Balanced 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.