Correlation Between Equity Growth and Pgim High
Can any of the company-specific risk be diversified away by investing in both Equity Growth and Pgim High 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 Pgim High 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 Pgim High Yield, you can compare the effects of market volatilities on Equity Growth and Pgim High 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 Pgim High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Growth and Pgim High.
Diversification Opportunities for Equity Growth and Pgim High
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Equity and Pgim is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Equity Growth Fund and Pgim High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim High Yield 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 Pgim High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pgim High Yield has no effect on the direction of Equity Growth i.e., Equity Growth and Pgim High go up and down completely randomly.
Pair Corralation between Equity Growth and Pgim High
Assuming the 90 days horizon Equity Growth Fund is expected to under-perform the Pgim High. In addition to that, Equity Growth is 1.22 times more volatile than Pgim High Yield. It trades about -0.08 of its total potential returns per unit of risk. Pgim High Yield is currently generating about -0.09 per unit of volatility. If you would invest 1,398 in Pgim High Yield on October 8, 2024 and sell it today you would lose (20.00) from holding Pgim High Yield or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equity Growth Fund vs. Pgim High Yield
Performance |
| Timeline |
| Equity Growth |
| Pgim High Yield |
Equity Growth and Pgim High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equity Growth and Pgim High
The main advantage of trading using opposite Equity Growth and Pgim High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Growth position performs unexpectedly, Pgim High 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 High will offset losses from the drop in Pgim High's long position.| Equity Growth vs. Gabelli Convertible And | Equity Growth vs. Advent Claymore Convertible | Equity Growth vs. Mainstay Vertible Fund | Equity Growth vs. Virtus Convertible |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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