Correlation Between Pgim Jennison and Value Line

Can any of the company-specific risk be diversified away by investing in both Pgim Jennison and Value Line 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 Value Line 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 Value Line Select, you can compare the effects of market volatilities on Pgim Jennison and Value Line 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 Value Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pgim Jennison and Value Line.

Diversification Opportunities for Pgim Jennison and Value Line

0.56

Correlation Coefficient

Pgim Jennison  Value Line

Very weak diversification

The 3 months correlation between PGIM and Value is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Pgim Jennison Technology and Value Line Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Line Select 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 Value Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Line Select has no effect on the direction of Pgim Jennison i.e., Pgim Jennison and Value Line go up and down completely randomly.

Pair Corralation between Pgim Jennison and Value Line

Assuming the 90 days horizon Pgim Jennison Technology is expected to generate 1.58 times more return on investment than Value Line. However, Pgim Jennison is 1.58 times more volatile than Value Line Select. It trades about 0.09 of its potential returns per unit of risk. Value Line Select is currently generating about 0.05 per unit of risk. If you would invest  1,272  in Pgim Jennison Technology on December 2, 2024 and sell it today you would earn a total of  1,144  from holding Pgim Jennison Technology or generate 89.94% return on investment over 90 days.

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

Pgim Jennison Technology  vs.  Value Line Select

Pgim Jennison Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pgim Jennison Technology 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.

Value Line Select

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Pgim Jennison and Value Line

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

The idea behind Pgim Jennison Technology and Value Line Select 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.