Correlation Between Pgim Jennison and Prudential Qma

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

By analyzing existing cross correlation between Pgim Jennison International and Prudential Qma Intl, you can compare the effects of market volatilities on Pgim Jennison and Prudential Qma 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 Prudential Qma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pgim Jennison and Prudential Qma.

Diversification Opportunities for Pgim Jennison and Prudential Qma

0.84

Correlation Coefficient

Pgim Jennison  Prudential Qma

Very poor diversification

The 3 months correlation between Pgim and Prudential is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Pgim Jennison International and Prudential Qma Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Qma Intl 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 International are associated (or correlated) with Prudential Qma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Qma Intl has no effect on the direction of Pgim Jennison i.e., Pgim Jennison and Prudential Qma go up and down completely randomly.

Pair Corralation between Pgim Jennison and Prudential Qma

Assuming the 90 days horizon Pgim Jennison International is expected to generate 1.18 times more return on investment than Prudential Qma. However, Pgim Jennison is 1.18 times more volatile than Prudential Qma Intl. It trades about 0.05 of its potential returns per unit of risk. Prudential Qma Intl is currently generating about 0.03 per unit of risk. If you would invest  2,341  in Pgim Jennison International on September 26, 2024 and sell it today you would earn a total of  650.00  from holding Pgim Jennison International or generate 27.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.8%
Values	Daily Returns

Pgim Jennison International  vs.  Prudential Qma Intl

Pgim Jennison Intern

Risk-Adjusted Performance

0 of 100

Very Weak

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

Prudential Qma Intl

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prudential Qma Intl 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 primary 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.

Pair Trading with Pgim Jennison and Prudential Qma

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

The idea behind Pgim Jennison International and Prudential Qma Intl 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.