Correlation Between FAM and Pgim Global
Can any of the company-specific risk be diversified away by investing in both FAM and Pgim Global 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 FAM and Pgim Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FAM and Pgim Global High, you can compare the effects of market volatilities on FAM and Pgim Global 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 FAM with a short position of Pgim Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAM and Pgim Global.
Diversification Opportunities for FAM and Pgim Global
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FAM and Pgim is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding FAM and Pgim Global High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Global High and FAM 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 FAM are associated (or correlated) with Pgim Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pgim Global High has no effect on the direction of FAM i.e., FAM and Pgim Global go up and down completely randomly.
Pair Corralation between FAM and Pgim Global
Considering the 90-day investment horizon FAM is expected to generate 1.05 times more return on investment than Pgim Global. However, FAM is 1.05 times more volatile than Pgim Global High. It trades about 0.09 of its potential returns per unit of risk. Pgim Global High is currently generating about 0.09 per unit of risk. If you would invest 501.00 in FAM on November 1, 2024 and sell it today you would earn a total of 173.00 from holding FAM or generate 34.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 82.56% |
| Values | Daily Returns |
FAM vs. Pgim Global High
Performance |
| Timeline |
| FAM |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Pgim Global High |
FAM and Pgim Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FAM and Pgim Global
The main advantage of trading using opposite FAM and Pgim Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAM position performs unexpectedly, Pgim Global 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 Global will offset losses from the drop in Pgim Global's long position.| FAM vs. Blackstone Gso Long | FAM vs. Blackstone Gso Senior | FAM vs. Nuveen Floating Rate | FAM vs. Pioneer Floating Rate |
| Pgim Global vs. Calamos LongShort Equity | Pgim Global vs. Virtus Global Multi | Pgim Global vs. Western Asset Diversified | Pgim Global vs. Munivest Fund |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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