Correlation Between VanEck Intermediate and PGIM ETF
Can any of the company-specific risk be diversified away by investing in both VanEck Intermediate 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 Intermediate 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 Intermediate Muni and PGIM ETF Trust, you can compare the effects of market volatilities on VanEck Intermediate 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 Intermediate with a short position of PGIM ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Intermediate and PGIM ETF.
Diversification Opportunities for VanEck Intermediate and PGIM ETF
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VanEck and PGIM is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Intermediate Muni 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 Intermediate 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 Intermediate Muni 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 Intermediate i.e., VanEck Intermediate and PGIM ETF go up and down completely randomly.
Pair Corralation between VanEck Intermediate and PGIM ETF
Considering the 90-day investment horizon VanEck Intermediate is expected to generate 1.0 times less return on investment than PGIM ETF. In addition to that, VanEck Intermediate is 1.3 times more volatile than PGIM ETF Trust. It trades about 0.12 of its total potential returns per unit of risk. PGIM ETF Trust is currently generating about 0.16 per unit of volatility. If you would invest 5,071 in PGIM ETF Trust on August 29, 2024 and sell it today you would earn a total of 49.00 from holding PGIM ETF Trust or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
VanEck Intermediate Muni vs. PGIM ETF Trust
Performance |
| Timeline |
| VanEck Intermediate Muni |
| PGIM ETF Trust |
VanEck Intermediate and PGIM ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Intermediate and PGIM ETF
The main advantage of trading using opposite VanEck Intermediate and PGIM ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Intermediate 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 Intermediate vs. VanEck Long Muni | VanEck Intermediate vs. VanEck Short Muni | VanEck Intermediate vs. SPDR Nuveen Bloomberg | VanEck Intermediate vs. Invesco National AMT Free |
| PGIM ETF vs. Xtrackers California Municipal | PGIM ETF vs. IQ MacKay Municipal | PGIM ETF vs. IQ MacKay Municipal | PGIM ETF vs. ALPS Intermediate Municipal |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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