Correlation Between Adyen NV and Pgim Jennison

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

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

Diversification Opportunities for Adyen NV and Pgim Jennison

0.43

Correlation Coefficient

Adyen NV  Pgim Jennison

Very weak diversification

The 3 months correlation between Adyen and Pgim is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Adyen NV and Pgim Jennison International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Jennison Intern and Adyen NV 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 Adyen NV 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 Intern has no effect on the direction of Adyen NV i.e., Adyen NV and Pgim Jennison go up and down completely randomly.

Pair Corralation between Adyen NV and Pgim Jennison

Assuming the 90 days horizon Adyen NV is expected to generate 1.02 times less return on investment than Pgim Jennison. In addition to that, Adyen NV is 4.0 times more volatile than Pgim Jennison International. It trades about 0.02 of its total potential returns per unit of risk. Pgim Jennison International is currently generating about 0.07 per unit of volatility. If you would invest  617.00  in Pgim Jennison International on October 4, 2024 and sell it today you would earn a total of  208.00  from holding Pgim Jennison International or generate 33.71% return on investment over 90 days.

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

Adyen NV  vs.  Pgim Jennison International

Adyen NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adyen NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Adyen NV is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pgim Jennison Intern

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pgim Jennison International has generated negative risk-adjusted returns adding no value to fund investors. 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 Adyen NV and Pgim Jennison

The main advantage of trading using opposite Adyen NV and Pgim Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adyen NV 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 Adyen NV and Pgim Jennison International 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.