Correlation Between PGIM Large and DBX ETF
Can any of the company-specific risk be diversified away by investing in both PGIM Large and DBX ETF 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 PGIM Large and DBX ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PGIM Large Cap Buffer and DBX ETF Trust, you can compare the effects of market volatilities on PGIM Large and DBX ETF 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 PGIM Large with a short position of DBX ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of PGIM Large and DBX ETF.
Diversification Opportunities for PGIM Large and DBX ETF
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PGIM and DBX is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding PGIM Large Cap Buffer and DBX ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBX ETF Trust and PGIM Large 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 PGIM Large Cap Buffer are associated (or correlated) with DBX ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBX ETF Trust has no effect on the direction of PGIM Large i.e., PGIM Large and DBX ETF go up and down completely randomly.
Pair Corralation between PGIM Large and DBX ETF
Given the investment horizon of 90 days PGIM Large is expected to generate 2.44 times less return on investment than DBX ETF. But when comparing it to its historical volatility, PGIM Large Cap Buffer is 1.15 times less risky than DBX ETF. It trades about 0.25 of its potential returns per unit of risk. DBX ETF Trust is currently generating about 0.53 of returns per unit of risk over similar time horizon. If you would invest 5,196 in DBX ETF Trust on November 2, 2024 and sell it today you would earn a total of 277.00 from holding DBX ETF Trust or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PGIM Large Cap Buffer vs. DBX ETF Trust
Performance |
| Timeline |
| PGIM Large Cap |
| DBX ETF Trust |
PGIM Large and DBX ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PGIM Large and DBX ETF
The main advantage of trading using opposite PGIM Large and DBX ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PGIM Large position performs unexpectedly, DBX ETF 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 DBX ETF will offset losses from the drop in DBX ETF's long position.| PGIM Large vs. FT Vest Equity | PGIM Large vs. Northern Lights | PGIM Large vs. Dimensional International High | PGIM Large vs. First Trust Exchange Traded |
| DBX ETF vs. SPDR MSCI USA | DBX ETF vs. American Century STOXX | DBX ETF vs. Hartford Multifactor Equity | DBX ETF vs. PIMCO RAFI Dynamic |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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