Correlation Between Ab Global and Pgim Jennison
Can any of the company-specific risk be diversified away by investing in both Ab Global 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 Ab Global and Pgim Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global Real and Pgim Jennison Technology, you can compare the effects of market volatilities on Ab Global 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 Ab Global with a short position of Pgim Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Pgim Jennison.
Diversification Opportunities for Ab Global and Pgim Jennison
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AEEIX and Pgim is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Real 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 Ab Global 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 Ab Global Real 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 Ab Global i.e., Ab Global and Pgim Jennison go up and down completely randomly.
Pair Corralation between Ab Global and Pgim Jennison
Assuming the 90 days horizon Ab Global Real is expected to generate 0.51 times more return on investment than Pgim Jennison. However, Ab Global Real is 1.96 times less risky than Pgim Jennison. It trades about 0.04 of its potential returns per unit of risk. Pgim Jennison Technology is currently generating about 0.02 per unit of risk. If you would invest 1,359 in Ab Global Real on December 2, 2024 and sell it today you would earn a total of 120.00 from holding Ab Global Real or generate 8.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Ab Global Real vs. Pgim Jennison Technology
Performance |
Timeline |
Ab Global Real |
Pgim Jennison Technology |
Ab Global and Pgim Jennison Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ab Global and Pgim Jennison
The main advantage of trading using opposite Ab Global and Pgim Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global 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.Ab Global vs. Artisan High Income | Ab Global vs. Mainstay High Yield | Ab Global vs. Buffalo High Yield | Ab Global vs. Payden High Income |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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