Correlation Between Pgim Jennison and Morgan Stanley

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

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

Diversification Opportunities for Pgim Jennison and Morgan Stanley

-0.16

Correlation Coefficient

Pgim Jennison  Morgan Stanley

Good diversification

The 3 months correlation between Pgim and Morgan is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Pgim Jennison Technology and Morgan Stanley Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley Insti and Pgim Jennison 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 Pgim Jennison Technology are associated (or correlated) with Morgan Stanley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morgan Stanley Insti has no effect on the direction of Pgim Jennison i.e., Pgim Jennison and Morgan Stanley go up and down completely randomly.

Pair Corralation between Pgim Jennison and Morgan Stanley

Assuming the 90 days horizon Pgim Jennison Technology is expected to generate 0.09 times more return on investment than Morgan Stanley. However, Pgim Jennison Technology is 11.61 times less risky than Morgan Stanley. It trades about -0.22 of its potential returns per unit of risk. Morgan Stanley Institutional is currently generating about -0.23 per unit of risk. If you would invest  2,728  in Pgim Jennison Technology on October 6, 2024 and sell it today you would lose (184.00) from holding Pgim Jennison Technology or give up 6.74% of portfolio value over 90 days.

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

Pgim Jennison Technology  vs.  Morgan Stanley Institutional

Pgim Jennison Technology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pgim Jennison Technology are ranked lower than 2 (%) 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.

Morgan Stanley Insti

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Morgan Stanley Institutional 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 February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Pgim Jennison and Morgan Stanley

The main advantage of trading using opposite Pgim Jennison and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pgim Jennison position performs unexpectedly, Morgan Stanley 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 Morgan Stanley will offset losses from the drop in Morgan Stanley's long position.

The idea behind Pgim Jennison Technology and Morgan Stanley Institutional 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.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.