Correlation Between Prudential Jennison and Perkins Mid

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

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

Diversification Opportunities for Prudential Jennison and Perkins Mid

0.51

Correlation Coefficient

Prudential Jennison  Perkins Mid

Very weak diversification

The 3 months correlation between Prudential and PERKINS is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Jennison Mid Cap and Perkins Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perkins Mid Cap and Prudential 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 Prudential Jennison Mid Cap are associated (or correlated) with Perkins Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perkins Mid Cap has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and Perkins Mid go up and down completely randomly.

Pair Corralation between Prudential Jennison and Perkins Mid

Assuming the 90 days horizon Prudential Jennison Mid Cap is expected to under-perform the Perkins Mid. In addition to that, Prudential Jennison is 1.23 times more volatile than Perkins Mid Cap. It trades about -0.06 of its total potential returns per unit of risk. Perkins Mid Cap is currently generating about 0.07 per unit of volatility. If you would invest  1,556  in Perkins Mid Cap on March 1, 2024 and sell it today you would earn a total of  46.00  from holding Perkins Mid Cap or generate 2.96% return on investment over 90 days.

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

Prudential Jennison Mid Cap  vs.  Perkins Mid Cap

Prudential Jennison Mid

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prudential Jennison Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Prudential Jennison is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Perkins Mid Cap

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Perkins Mid Cap are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Perkins Mid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Prudential Jennison and Perkins Mid

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

The idea behind Prudential Jennison Mid Cap and Perkins Mid Cap 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.