Correlation Between Pgim Jennison and Pax Msci

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

Diversification Opportunities for Pgim Jennison and Pax Msci

-0.37

Correlation Coefficient

Pgim Jennison  Pax Msci

Very good diversification

The 3 months correlation between Pgim and Pax is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Pgim Jennison Diversified and Pax Msci Eafe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pax Msci Eafe 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 Pax Msci. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pax Msci Eafe has no effect on the direction of Pgim Jennison i.e., Pgim Jennison and Pax Msci go up and down completely randomly.

Pair Corralation between Pgim Jennison and Pax Msci

Assuming the 90 days horizon Pgim Jennison Diversified is expected to under-perform the Pax Msci. In addition to that, Pgim Jennison is 1.68 times more volatile than Pax Msci Eafe. It trades about -0.09 of its total potential returns per unit of risk. Pax Msci Eafe is currently generating about 0.15 per unit of volatility. If you would invest  1,025  in Pax Msci Eafe on December 27, 2024 and sell it today you would earn a total of  84.00  from holding Pax Msci Eafe or generate 8.2% return on investment over 90 days.

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

Pgim Jennison Diversified  vs.  Pax Msci Eafe

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 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.

Pax Msci Eafe

Risk-Adjusted Performance

Good

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

Pair Trading with Pgim Jennison and Pax Msci

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

The idea behind Pgim Jennison Diversified and Pax Msci Eafe 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.

Check out your portfolio center.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.