Correlation Between Exela Technologies and Pgim Jennison

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

By analyzing existing cross correlation between Exela Technologies Preferred and Pgim Jennison Technology, you can compare the effects of market volatilities on Exela Technologies 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 Exela Technologies with a short position of Pgim Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exela Technologies and Pgim Jennison.

Diversification Opportunities for Exela Technologies and Pgim Jennison

-0.52

Correlation Coefficient

Exela Technologies  Pgim Jennison

Excellent diversification

The 3 months correlation between Exela and Pgim is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Exela Technologies Preferred and Pgim Jennison Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Jennison Technology and Exela Technologies 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 Exela Technologies Preferred 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 Technology has no effect on the direction of Exela Technologies i.e., Exela Technologies and Pgim Jennison go up and down completely randomly.

Pair Corralation between Exela Technologies and Pgim Jennison

Assuming the 90 days horizon Exela Technologies Preferred is expected to under-perform the Pgim Jennison. In addition to that, Exela Technologies is 7.25 times more volatile than Pgim Jennison Technology. It trades about -0.83 of its total potential returns per unit of risk. Pgim Jennison Technology is currently generating about 0.29 per unit of volatility. If you would invest  2,672  in Pgim Jennison Technology on September 5, 2024 and sell it today you would earn a total of  208.00  from holding Pgim Jennison Technology or generate 7.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	36.36%
Values	Daily Returns

Exela Technologies Preferred  vs.  Pgim Jennison Technology

Exela Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exela Technologies Preferred has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Preferred Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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 basic indicators, Pgim Jennison showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exela Technologies and Pgim Jennison

The main advantage of trading using opposite Exela Technologies and Pgim Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exela Technologies 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.

The idea behind Exela Technologies Preferred and Pgim Jennison Technology 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.