Correlation Between Prudential Core and Pgim Jennison
Can any of the company-specific risk be diversified away by investing in both Prudential Core and Pgim Jennison 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 Prudential Core and Pgim Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential E Bond and Pgim Jennison Global, you can compare the effects of market volatilities on Prudential Core and Pgim Jennison 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 Prudential Core with a short position of Pgim Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Core and Pgim Jennison.
Diversification Opportunities for Prudential Core and Pgim Jennison
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Prudential and Pgim is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Prudential E Bond and Pgim Jennison Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Jennison Global and Prudential Core 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 Prudential E Bond are associated (or correlated) with Pgim Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pgim Jennison Global has no effect on the direction of Prudential Core i.e., Prudential Core and Pgim Jennison go up and down completely randomly.
Pair Corralation between Prudential Core and Pgim Jennison
Assuming the 90 days horizon Prudential Core is expected to generate 2.04 times less return on investment than Pgim Jennison. But when comparing it to its historical volatility, Prudential E Bond is 3.32 times less risky than Pgim Jennison. It trades about 0.08 of its potential returns per unit of risk. Pgim Jennison Global is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,408 in Pgim Jennison Global on September 3, 2024 and sell it today you would earn a total of 387.00 from holding Pgim Jennison Global or generate 8.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Prudential E Bond vs. Pgim Jennison Global
Performance |
Timeline |
Prudential E Bond |
Pgim Jennison Global |
Prudential Core and Pgim Jennison Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Prudential Core and Pgim Jennison
The main advantage of trading using opposite Prudential Core and Pgim Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Core position performs unexpectedly, Pgim Jennison 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 Pgim Jennison will offset losses from the drop in Pgim Jennison's long position.Prudential Core vs. Franklin Natural Resources | Prudential Core vs. Dreyfus Natural Resources | Prudential Core vs. Jennison Natural Resources | Prudential Core vs. Oil Gas Ultrasector |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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