Correlation Between Pgim Jennison and John Hancock

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

Diversification Opportunities for Pgim Jennison and John Hancock

-0.65

Correlation Coefficient

Pgim Jennison  John Hancock

Excellent diversification

The 3 months correlation between Pgim and John is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Pgim Jennison Diversified and John Hancock Esg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock Esg 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 John Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Hancock Esg has no effect on the direction of Pgim Jennison i.e., Pgim Jennison and John Hancock go up and down completely randomly.

Pair Corralation between Pgim Jennison and John Hancock

Assuming the 90 days horizon Pgim Jennison Diversified is expected to generate 5.23 times more return on investment than John Hancock. However, Pgim Jennison is 5.23 times more volatile than John Hancock Esg. It trades about 0.19 of its potential returns per unit of risk. John Hancock Esg is currently generating about -0.08 per unit of risk. If you would invest  1,942  in Pgim Jennison Diversified on September 5, 2024 and sell it today you would earn a total of  242.00  from holding Pgim Jennison Diversified or generate 12.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Pgim Jennison Diversified  vs.  John Hancock Esg

Pgim Jennison Diversified

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pgim Jennison Diversified are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Pgim Jennison may actually be approaching a critical reversion point that can send shares even higher in January 2025.

John Hancock Esg

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days John Hancock Esg has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, John Hancock 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 John Hancock

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

The idea behind Pgim Jennison Diversified and John Hancock Esg 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.