Correlation Between Valic Company and Pgim Jennison
Can any of the company-specific risk be diversified away by investing in both Valic Company 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 Valic Company and Pgim Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valic Company I and Pgim Jennison Diversified, you can compare the effects of market volatilities on Valic Company 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 Valic Company with a short position of Pgim Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Pgim Jennison.
Diversification Opportunities for Valic Company and Pgim Jennison
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Valic and PGIM is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Pgim Jennison Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Jennison Diversified and Valic Company 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 Valic Company I 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 Diversified has no effect on the direction of Valic Company i.e., Valic Company and Pgim Jennison go up and down completely randomly.
Pair Corralation between Valic Company and Pgim Jennison
Assuming the 90 days horizon Valic Company I is expected to generate 0.64 times more return on investment than Pgim Jennison. However, Valic Company I is 1.55 times less risky than Pgim Jennison. It trades about -0.22 of its potential returns per unit of risk. Pgim Jennison Diversified is currently generating about -0.14 per unit of risk. If you would invest 1,876 in Valic Company I on December 2, 2024 and sell it today you would lose (60.00) from holding Valic Company I or give up 3.2% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Valic Company I vs. Pgim Jennison Diversified
Performance |
Timeline |
Valic Company I |
Pgim Jennison Diversified |
Valic Company and Pgim Jennison Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Valic Company and Pgim Jennison
The main advantage of trading using opposite Valic Company and Pgim Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company 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.Valic Company vs. Western Asset Premier | Valic Company vs. Us Government Securities | Valic Company vs. Inverse Government Long | Valic Company vs. Us Government Securities |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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