Correlation Between Prudential Emerging and Pgim Securitized
Can any of the company-specific risk be diversified away by investing in both Prudential Emerging and Pgim Securitized 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 Emerging and Pgim Securitized into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Emerging Markets and Pgim Securitized Credit, you can compare the effects of market volatilities on Prudential Emerging and Pgim Securitized 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 Emerging with a short position of Pgim Securitized. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Emerging and Pgim Securitized.
Diversification Opportunities for Prudential Emerging and Pgim Securitized
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Prudential and Pgim is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Emerging Markets and Pgim Securitized Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Securitized Credit and Prudential Emerging 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 Emerging Markets are associated (or correlated) with Pgim Securitized. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pgim Securitized Credit has no effect on the direction of Prudential Emerging i.e., Prudential Emerging and Pgim Securitized go up and down completely randomly.
Pair Corralation between Prudential Emerging and Pgim Securitized
Assuming the 90 days horizon Prudential Emerging Markets is expected to under-perform the Pgim Securitized. In addition to that, Prudential Emerging is 3.71 times more volatile than Pgim Securitized Credit. It trades about -0.08 of its total potential returns per unit of risk. Pgim Securitized Credit is currently generating about 0.24 per unit of volatility. If you would invest 968.00 in Pgim Securitized Credit on August 31, 2024 and sell it today you would earn a total of 7.00 from holding Pgim Securitized Credit or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Emerging Markets vs. Pgim Securitized Credit
Performance |
| Timeline |
| Prudential Emerging |
| Pgim Securitized Credit |
Prudential Emerging and Pgim Securitized Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Emerging and Pgim Securitized
The main advantage of trading using opposite Prudential Emerging and Pgim Securitized positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Emerging position performs unexpectedly, Pgim Securitized 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 Securitized will offset losses from the drop in Pgim Securitized's long position.| Prudential Emerging vs. Origin Emerging Markets | Prudential Emerging vs. Siit Emerging Markets | Prudential Emerging vs. Goldman Sachs Emerging | Prudential Emerging vs. Ep Emerging Markets |
| Pgim Securitized vs. Qs Large Cap | Pgim Securitized vs. Goldman Sachs Large | Pgim Securitized vs. Victory Strategic Allocation | Pgim Securitized vs. Legg Mason Bw |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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