Correlation Between VHAI and Pgim Jennison

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

By analyzing existing cross correlation between VHAI and Pgim Jennison Technology, you can compare the effects of market volatilities on VHAI and Pgim Jennison 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 VHAI with a short position of Pgim Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of VHAI and Pgim Jennison.

Diversification Opportunities for VHAI and Pgim Jennison

-0.78

Correlation Coefficient

VHAI  Pgim Jennison

Pay attention - limited upside

The 3 months correlation between VHAI and Pgim is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding VHAI and Pgim Jennison Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Jennison Technology and VHAI 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 VHAI are associated (or correlated) with Pgim Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pgim Jennison Technology has no effect on the direction of VHAI i.e., VHAI and Pgim Jennison go up and down completely randomly.

Pair Corralation between VHAI and Pgim Jennison

Given the investment horizon of 90 days VHAI is expected to under-perform the Pgim Jennison. In addition to that, VHAI is 9.88 times more volatile than Pgim Jennison Technology. It trades about -0.04 of its total potential returns per unit of risk. Pgim Jennison Technology is currently generating about 0.17 per unit of volatility. If you would invest  2,545  in Pgim Jennison Technology on September 12, 2024 and sell it today you would earn a total of  351.00  from holding Pgim Jennison Technology or generate 13.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	87.5%
Values	Daily Returns

VHAI  vs.  Pgim Jennison Technology

VHAI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VHAI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pgim Jennison Technology

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pgim Jennison Technology 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 showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VHAI and Pgim Jennison

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

The idea behind VHAI and Pgim Jennison Technology 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.