Correlation Between Ivy Advantus and Pgim Jennison

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

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

Diversification Opportunities for Ivy Advantus and Pgim Jennison

-0.25

Correlation Coefficient

Ivy Advantus  Pgim Jennison

Very good diversification

The 3 months correlation between Ivy and Pgim is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ivy Advantus 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 Ivy Advantus 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 Ivy Advantus 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 Ivy Advantus i.e., Ivy Advantus and Pgim Jennison go up and down completely randomly.

Pair Corralation between Ivy Advantus and Pgim Jennison

Assuming the 90 days horizon Ivy Advantus Real is expected to under-perform the Pgim Jennison. In addition to that, Ivy Advantus is 1.62 times more volatile than Pgim Jennison Technology. It trades about -0.33 of its total potential returns per unit of risk. Pgim Jennison Technology is currently generating about -0.09 per unit of volatility. If you would invest  2,638  in Pgim Jennison Technology on September 25, 2024 and sell it today you would lose (78.00) from holding Pgim Jennison Technology or give up 2.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Ivy Advantus Real  vs.  Pgim Jennison Technology

Ivy Advantus Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ivy Advantus Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pgim Jennison Technology

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pgim Jennison Technology are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong 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 Ivy Advantus and Pgim Jennison

The main advantage of trading using opposite Ivy Advantus and Pgim Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivy Advantus 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 Ivy Advantus Real and Pgim Jennison Technology 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.