Correlation Between Dupont De and Pgim Jennison

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

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

Diversification Opportunities for Dupont De and Pgim Jennison

0.57

Correlation Coefficient

Dupont De  Pgim Jennison

Very weak diversification

The 3 months correlation between Dupont and PGIM is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Pgim Jennison Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Jennison Mid and Dupont De 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 Dupont De Nemours 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 Mid has no effect on the direction of Dupont De i.e., Dupont De and Pgim Jennison go up and down completely randomly.

Pair Corralation between Dupont De and Pgim Jennison

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Pgim Jennison. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 1.01 times less risky than Pgim Jennison. The stock trades about -0.1 of its potential returns per unit of risk. The Pgim Jennison Mid Cap is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,187  in Pgim Jennison Mid Cap on October 23, 2024 and sell it today you would earn a total of  45.00  from holding Pgim Jennison Mid Cap or generate 2.06% return on investment over 90 days.

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

Dupont De Nemours  vs.  Pgim Jennison Mid Cap

Dupont De Nemours

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dupont De Nemours has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pgim Jennison Mid

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pgim Jennison Mid Cap are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental 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 Dupont De and Pgim Jennison

The main advantage of trading using opposite Dupont De and Pgim Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De 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 Dupont De Nemours and Pgim Jennison Mid Cap 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.