Correlation Between Ares Dynamic and PGIM Short
Can any of the company-specific risk be diversified away by investing in both Ares Dynamic and PGIM Short 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 Ares Dynamic and PGIM Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ares Dynamic Credit and PGIM Short Duration, you can compare the effects of market volatilities on Ares Dynamic and PGIM Short 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 Ares Dynamic with a short position of PGIM Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Dynamic and PGIM Short.
Diversification Opportunities for Ares Dynamic and PGIM Short
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ares and PGIM is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ares Dynamic Credit and PGIM Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGIM Short Duration and Ares Dynamic 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 Ares Dynamic Credit are associated (or correlated) with PGIM Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGIM Short Duration has no effect on the direction of Ares Dynamic i.e., Ares Dynamic and PGIM Short go up and down completely randomly.
Pair Corralation between Ares Dynamic and PGIM Short
Given the investment horizon of 90 days Ares Dynamic Credit is expected to generate 1.03 times more return on investment than PGIM Short. However, Ares Dynamic is 1.03 times more volatile than PGIM Short Duration. It trades about 0.14 of its potential returns per unit of risk. PGIM Short Duration is currently generating about 0.1 per unit of risk. If you would invest 1,501 in Ares Dynamic Credit on August 27, 2024 and sell it today you would earn a total of 26.00 from holding Ares Dynamic Credit or generate 1.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Dynamic Credit vs. PGIM Short Duration
Performance |
| Timeline |
| Ares Dynamic Credit |
| PGIM Short Duration |
Ares Dynamic and PGIM Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Dynamic and PGIM Short
The main advantage of trading using opposite Ares Dynamic and PGIM Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Dynamic position performs unexpectedly, PGIM Short 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 Short will offset losses from the drop in PGIM Short's long position.| Ares Dynamic vs. Eaton Vance Floating | Ares Dynamic vs. NXG NextGen Infrastructure | Ares Dynamic vs. GAMCO Natural Resources | Ares Dynamic vs. MFS Investment Grade |
| PGIM Short vs. John Hancock Income | PGIM Short vs. MFS High Income | PGIM Short vs. MFS Investment Grade | PGIM Short vs. Blackrock Muniholdings Closed |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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