Correlation Between Pgim Securitized and Prudential Jennison

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

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

Diversification Opportunities for Pgim Securitized and Prudential Jennison

-0.77

Correlation Coefficient

Pgim Securitized  Prudential Jennison

Pay attention - limited upside

The 3 months correlation between Pgim and Prudential is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Pgim Securitized Credit and Prudential Jennison Internatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison and Pgim Securitized 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 Securitized Credit are associated (or correlated) with Prudential Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Jennison has no effect on the direction of Pgim Securitized i.e., Pgim Securitized and Prudential Jennison go up and down completely randomly.

Pair Corralation between Pgim Securitized and Prudential Jennison

Assuming the 90 days horizon Pgim Securitized Credit is not expected to generate positive returns. However, Pgim Securitized Credit is 29.31 times less risky than Prudential Jennison. It waists most of its returns potential to compensate for thr risk taken. Prudential Jennison is generating about -0.07 per unit of risk. If you would invest  975.00  in Pgim Securitized Credit on September 27, 2024 and sell it today you would earn a total of  0.00  from holding Pgim Securitized Credit or generate 0.0% return on investment over 90 days.

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

Pgim Securitized Credit  vs.  Prudential Jennison Internatio

Pgim Securitized Credit

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pgim Securitized Credit are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pgim Securitized is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Prudential Jennison

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prudential Jennison International 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 Securitized and Prudential Jennison

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

The idea behind Pgim Securitized Credit and Prudential Jennison International 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.