Correlation Between Equity Growth and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both Equity Growth and Prudential 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 Equity Growth and Prudential Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equity Growth Fund and Prudential Jennison Focused, you can compare the effects of market volatilities on Equity Growth and Prudential 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 Equity Growth with a short position of Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Growth and Prudential Jennison.
Diversification Opportunities for Equity Growth and Prudential Jennison
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Equity and Prudential is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Equity Growth Fund and Prudential Jennison Focused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison and Equity Growth 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 Equity Growth Fund are associated (or correlated) with Prudential Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Jennison has no effect on the direction of Equity Growth i.e., Equity Growth and Prudential Jennison go up and down completely randomly.
Pair Corralation between Equity Growth and Prudential Jennison
Assuming the 90 days horizon Equity Growth Fund is expected to generate 0.73 times more return on investment than Prudential Jennison. However, Equity Growth Fund is 1.37 times less risky than Prudential Jennison. It trades about 0.11 of its potential returns per unit of risk. Prudential Jennison Focused is currently generating about 0.08 per unit of risk. If you would invest 3,587 in Equity Growth Fund on August 21, 2025 and sell it today you would earn a total of 186.00 from holding Equity Growth Fund or generate 5.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equity Growth Fund vs. Prudential Jennison Focused
Performance |
| Timeline |
| Equity Growth |
| Prudential Jennison |
Equity Growth and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equity Growth and Prudential Jennison
The main advantage of trading using opposite Equity Growth and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Growth position performs unexpectedly, Prudential 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 Prudential Jennison will offset losses from the drop in Prudential Jennison's long position.| Equity Growth vs. Income Growth Fund | Equity Growth vs. Income Growth Fund | Equity Growth vs. Siit Large Cap | Equity Growth vs. Fam Value Fund |
| Prudential Jennison vs. Allianzgi Focused Growth | Prudential Jennison vs. Allianzgi Focused Growth | Prudential Jennison vs. Fam Value Fund | Prudential Jennison vs. Baron Opportunity Fund |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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