Correlation Between Alphabet and Pgim Jennison

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

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

Diversification Opportunities for Alphabet and Pgim Jennison

0.51

Correlation Coefficient

Alphabet  Pgim Jennison

Very weak diversification

The 3 months correlation between Alphabet and Pgim is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class A and Pgim Jennison Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Jennison Diversified and Alphabet 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 Alphabet Inc Class A 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 Diversified has no effect on the direction of Alphabet i.e., Alphabet and Pgim Jennison go up and down completely randomly.

Pair Corralation between Alphabet and Pgim Jennison

Assuming the 90 days horizon Alphabet Inc Class A is expected to generate 1.8 times more return on investment than Pgim Jennison. However, Alphabet is 1.8 times more volatile than Pgim Jennison Diversified. It trades about 0.24 of its potential returns per unit of risk. Pgim Jennison Diversified is currently generating about 0.08 per unit of risk. If you would invest  23,901  in Alphabet Inc Class A on September 10, 2025 and sell it today you would earn a total of  7,471  from holding Alphabet Inc Class A or generate 31.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Alphabet Inc Class A  vs.  Pgim Jennison Diversified

Alphabet Class A

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alphabet Inc Class A are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain technical and fundamental indicators, Alphabet disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pgim Jennison Diversified

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Pgim Jennison Diversified are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. 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.

Pair Trading with Alphabet and Pgim Jennison

The main advantage of trading using opposite Alphabet and Pgim Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet 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 Alphabet Inc Class A and Pgim Jennison Diversified 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.