Correlation Between Pgim Jennison and J Hancock

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

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

Diversification Opportunities for Pgim Jennison and J Hancock

0.96

Correlation Coefficient

Pgim Jennison  J Hancock

Almost no diversification

The 3 months correlation between Pgim and JROUX is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Pgim Jennison Diversified and J Hancock Ii in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J Hancock Ii 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 Diversified are associated (or correlated) with J Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Hancock Ii has no effect on the direction of Pgim Jennison i.e., Pgim Jennison and J Hancock go up and down completely randomly.

Pair Corralation between Pgim Jennison and J Hancock

Assuming the 90 days horizon Pgim Jennison Diversified is expected to generate 1.5 times more return on investment than J Hancock. However, Pgim Jennison is 1.5 times more volatile than J Hancock Ii. It trades about 0.13 of its potential returns per unit of risk. J Hancock Ii is currently generating about 0.1 per unit of risk. If you would invest  1,122  in Pgim Jennison Diversified on September 12, 2024 and sell it today you would earn a total of  1,072  from holding Pgim Jennison Diversified or generate 95.54% return on investment over 90 days.

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

Pgim Jennison Diversified  vs.  J Hancock Ii

Pgim Jennison Diversified

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pgim Jennison Diversified are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Pgim Jennison may actually be approaching a critical reversion point that can send shares even higher in January 2025.

J Hancock Ii

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in J Hancock Ii are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, J Hancock is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pgim Jennison and J Hancock

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

The idea behind Pgim Jennison Diversified and J Hancock Ii 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.