Correlation Between Pgim Jennison and Northern Global

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

Diversification Opportunities for Pgim Jennison and Northern Global

0.66

Correlation Coefficient

Pgim Jennison  Northern Global

Poor diversification

The 3 months correlation between PGIM and Northern is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Pgim Jennison Diversified and Northern Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Global Real 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 Northern Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Global Real has no effect on the direction of Pgim Jennison i.e., Pgim Jennison and Northern Global go up and down completely randomly.

Pair Corralation between Pgim Jennison and Northern Global

Assuming the 90 days horizon Pgim Jennison Diversified is expected to under-perform the Northern Global. In addition to that, Pgim Jennison is 2.56 times more volatile than Northern Global Real. It trades about -0.2 of its total potential returns per unit of risk. Northern Global Real is currently generating about 0.31 per unit of volatility. If you would invest  962.00  in Northern Global Real on December 4, 2024 and sell it today you would earn a total of  28.00  from holding Northern Global Real or generate 2.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Pgim Jennison Diversified  vs.  Northern Global Real

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 weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Northern Global Real

Risk-Adjusted Performance

Very Weak

Over the last 90 days Northern Global Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Northern Global 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 Northern Global

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

The idea behind Pgim Jennison Diversified and Northern Global Real 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.