Correlation Between Mainstay Cushing and Pgim Jennison

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

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

Diversification Opportunities for Mainstay Cushing and Pgim Jennison

0.79

Correlation Coefficient

Mainstay Cushing  Pgim Jennison

Poor diversification

The 3 months correlation between Mainstay and Pgim is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Cushing Mlp 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 Mainstay Cushing 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 Mainstay Cushing Mlp 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 Mainstay Cushing i.e., Mainstay Cushing and Pgim Jennison go up and down completely randomly.

Pair Corralation between Mainstay Cushing and Pgim Jennison

Assuming the 90 days horizon Mainstay Cushing Mlp is expected to generate 1.02 times more return on investment than Pgim Jennison. However, Mainstay Cushing is 1.02 times more volatile than Pgim Jennison Natural. It trades about 0.07 of its potential returns per unit of risk. Pgim Jennison Natural is currently generating about 0.04 per unit of risk. If you would invest  1,213  in Mainstay Cushing Mlp on December 29, 2024 and sell it today you would earn a total of  64.00  from holding Mainstay Cushing Mlp or generate 5.28% return on investment over 90 days.

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

Mainstay Cushing Mlp  vs.  Pgim Jennison Natural

Mainstay Cushing Mlp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Cushing Mlp are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Mainstay Cushing 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

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pgim Jennison Natural are ranked lower than 3 (%) 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 Mainstay Cushing and Pgim Jennison

The main advantage of trading using opposite Mainstay Cushing and Pgim Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Cushing 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 Mainstay Cushing Mlp 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.

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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.