Correlation Between Prudential Jennison and Pgim Jennison

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Prudential Jennison 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 Jennison 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 Jennison International and Pgim Jennison Natural, you can compare the effects of market volatilities on Prudential Jennison 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 Jennison with a short position of Pgim Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and Pgim Jennison.

Diversification Opportunities for Prudential Jennison and Pgim Jennison

0.21
  Correlation Coefficient

Modest diversification

The 3 months correlation between Prudential and Pgim is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Internatio and Pgim Jennison Natural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Jennison Natural and Prudential 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 Prudential Jennison International 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 Natural has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and Pgim Jennison go up and down completely randomly.

Pair Corralation between Prudential Jennison and Pgim Jennison

Assuming the 90 days horizon Prudential Jennison International is expected to under-perform the Pgim Jennison. In addition to that, Prudential Jennison is 1.27 times more volatile than Pgim Jennison Natural. It trades about -0.17 of its total potential returns per unit of risk. Pgim Jennison Natural is currently generating about 0.21 per unit of volatility. If you would invest  5,850  in Pgim Jennison Natural on January 29, 2024 and sell it today you would earn a total of  212.00  from holding Pgim Jennison Natural or generate 3.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Prudential Jennison Internatio  vs.  Pgim Jennison Natural

 Performance 
       Timeline  
Prudential Jennison 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Prudential Jennison International are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Prudential Jennison is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Pgim Jennison Natural 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Pgim Jennison Natural are ranked lower than 20 (%) 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.

Prudential Jennison and Pgim Jennison Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Prudential Jennison and Pgim Jennison

The main advantage of trading using opposite Prudential Jennison and Pgim Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Jennison 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 Prudential Jennison International and Pgim Jennison Natural 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.
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 Transaction History module to view history of all your transactions and understand their impact on performance.

Other Complementary Tools

CEOs Directory
Screen CEOs from public companies around the world
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Money Managers
Screen money managers from public funds and ETFs managed around the world