Correlation Between Baillie Gifford and Pgim Jennison

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

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

Diversification Opportunities for Baillie Gifford and Pgim Jennison

-0.52

Correlation Coefficient

Baillie Gifford  Pgim Jennison

Excellent diversification

The 3 months correlation between Baillie and Pgim is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Baillie Gifford Health 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 Baillie Gifford 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 Baillie Gifford Health 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 Baillie Gifford i.e., Baillie Gifford and Pgim Jennison go up and down completely randomly.

Pair Corralation between Baillie Gifford and Pgim Jennison

Assuming the 90 days horizon Baillie Gifford is expected to generate 1.28 times less return on investment than Pgim Jennison. In addition to that, Baillie Gifford is 2.72 times more volatile than Pgim Jennison Diversified. It trades about 0.11 of its total potential returns per unit of risk. Pgim Jennison Diversified is currently generating about 0.4 per unit of volatility. If you would invest  2,090  in Pgim Jennison Diversified on September 19, 2024 and sell it today you would earn a total of  152.00  from holding Pgim Jennison Diversified or generate 7.27% return on investment over 90 days.

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

Baillie Gifford Health  vs.  Pgim Jennison Diversified

Baillie Gifford Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baillie Gifford Health has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pgim Jennison Diversified

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pgim Jennison Diversified are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Pgim Jennison may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Baillie Gifford and Pgim Jennison

The main advantage of trading using opposite Baillie Gifford and Pgim Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baillie Gifford 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 Baillie Gifford Health 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.