Correlation Between VanEck Investment and PGIM ETF
Can any of the company-specific risk be diversified away by investing in both VanEck Investment and PGIM 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 VanEck Investment and PGIM ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Investment Grade and PGIM ETF Trust, you can compare the effects of market volatilities on VanEck Investment and PGIM 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 VanEck Investment with a short position of PGIM ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Investment and PGIM ETF.
Diversification Opportunities for VanEck Investment and PGIM ETF
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between VanEck and PGIM is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Investment Grade and PGIM ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGIM ETF Trust and VanEck Investment 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 VanEck Investment Grade are associated (or correlated) with PGIM ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGIM ETF Trust has no effect on the direction of VanEck Investment i.e., VanEck Investment and PGIM ETF go up and down completely randomly.
Pair Corralation between VanEck Investment and PGIM ETF
Given the investment horizon of 90 days VanEck Investment is expected to generate 1.59 times less return on investment than PGIM ETF. But when comparing it to its historical volatility, VanEck Investment Grade is 2.05 times less risky than PGIM ETF. It trades about 0.43 of its potential returns per unit of risk. PGIM ETF Trust is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 4,270 in PGIM ETF Trust on August 27, 2024 and sell it today you would earn a total of 831.00 from holding PGIM ETF Trust or generate 19.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck Investment Grade vs. PGIM ETF Trust
Performance |
| Timeline |
| VanEck Investment Grade |
| PGIM ETF Trust |
VanEck Investment and PGIM ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Investment and PGIM ETF
The main advantage of trading using opposite VanEck Investment and PGIM ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Investment position performs unexpectedly, PGIM 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 PGIM ETF will offset losses from the drop in PGIM ETF's long position.| VanEck Investment vs. SPDR Bloomberg Investment | VanEck Investment vs. iShares Floating Rate | VanEck Investment vs. SPDR Barclays Long | VanEck Investment vs. Invesco Variable Rate |
| PGIM ETF vs. Franklin Liberty Short | PGIM ETF vs. SPDR Bloomberg Investment | PGIM ETF vs. VanEck Investment Grade |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |