Correlation Between Pgim Jennison and Mfs Municipal

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

Diversification Opportunities for Pgim Jennison and Mfs Municipal

-0.17

Correlation Coefficient

Pgim Jennison  Mfs Municipal

Good diversification

The 3 months correlation between Pgim and Mfs is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Pgim Jennison Diversified and Mfs Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Municipal Income 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 Mfs Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Municipal Income has no effect on the direction of Pgim Jennison i.e., Pgim Jennison and Mfs Municipal go up and down completely randomly.

Pair Corralation between Pgim Jennison and Mfs Municipal

Assuming the 90 days horizon Pgim Jennison Diversified is expected to generate 5.7 times more return on investment than Mfs Municipal. However, Pgim Jennison is 5.7 times more volatile than Mfs Municipal Income. It trades about 0.18 of its potential returns per unit of risk. Mfs Municipal Income is currently generating about 0.53 per unit of risk. If you would invest  2,154  in Pgim Jennison Diversified on September 13, 2024 and sell it today you would earn a total of  78.00  from holding Pgim Jennison Diversified or generate 3.62% 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.  Mfs Municipal Income

Pgim Jennison Diversified

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pgim Jennison Diversified are ranked lower than 13 (%) 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.

Mfs Municipal Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mfs Municipal Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Mfs Municipal 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 Mfs Municipal

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

The idea behind Pgim Jennison Diversified and Mfs Municipal Income 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.