Correlation Between Pgim Jennison and Victory Integrity

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

Diversification Opportunities for Pgim Jennison and Victory Integrity

0.92

Correlation Coefficient

Pgim Jennison  Victory Integrity

Almost no diversification

The 3 months correlation between Pgim and Victory is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Pgim Jennison Diversified and Victory Integrity Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Integrity Small 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 Victory Integrity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Integrity Small has no effect on the direction of Pgim Jennison i.e., Pgim Jennison and Victory Integrity go up and down completely randomly.

Pair Corralation between Pgim Jennison and Victory Integrity

Assuming the 90 days horizon Pgim Jennison Diversified is expected to under-perform the Victory Integrity. In addition to that, Pgim Jennison is 1.36 times more volatile than Victory Integrity Small Cap. It trades about -0.09 of its total potential returns per unit of risk. Victory Integrity Small Cap is currently generating about -0.1 per unit of volatility. If you would invest  2,704  in Victory Integrity Small Cap on December 28, 2024 and sell it today you would lose (185.00) from holding Victory Integrity Small Cap or give up 6.84% of portfolio value over 90 days.

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

Pgim Jennison Diversified  vs.  Victory Integrity Small Cap

Pgim Jennison Diversified

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pgim Jennison Diversified has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest unsteady 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.

Victory Integrity Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Victory Integrity Small Cap 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 Victory Integrity

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

The idea behind Pgim Jennison Diversified and Victory Integrity Small Cap 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.