Correlation Between SPDR Bloomberg and PGIM Active
Can any of the company-specific risk be diversified away by investing in both SPDR Bloomberg and PGIM Active 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 SPDR Bloomberg and PGIM Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Bloomberg High and PGIM Active High, you can compare the effects of market volatilities on SPDR Bloomberg and PGIM Active 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 SPDR Bloomberg with a short position of PGIM Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Bloomberg and PGIM Active.
Diversification Opportunities for SPDR Bloomberg and PGIM Active
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between SPDR and PGIM is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Bloomberg High and PGIM Active High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGIM Active High and SPDR Bloomberg 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 SPDR Bloomberg High are associated (or correlated) with PGIM Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGIM Active High has no effect on the direction of SPDR Bloomberg i.e., SPDR Bloomberg and PGIM Active go up and down completely randomly.
Pair Corralation between SPDR Bloomberg and PGIM Active
Considering the 90-day investment horizon SPDR Bloomberg High is expected to generate 1.25 times more return on investment than PGIM Active. However, SPDR Bloomberg is 1.25 times more volatile than PGIM Active High. It trades about 0.28 of its potential returns per unit of risk. PGIM Active High is currently generating about 0.34 per unit of risk. If you would invest 9,477 in SPDR Bloomberg High on October 20, 2024 and sell it today you would earn a total of 168.00 from holding SPDR Bloomberg High or generate 1.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Bloomberg High vs. PGIM Active High
Performance |
| Timeline |
| SPDR Bloomberg High |
| PGIM Active High |
SPDR Bloomberg and PGIM Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Bloomberg and PGIM Active
The main advantage of trading using opposite SPDR Bloomberg and PGIM Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Bloomberg position performs unexpectedly, PGIM Active 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 Active will offset losses from the drop in PGIM Active's long position.| SPDR Bloomberg vs. iShares iBoxx High | SPDR Bloomberg vs. iShares iBoxx Investment | SPDR Bloomberg vs. iShares JP Morgan | SPDR Bloomberg vs. iShares TIPS Bond |
| PGIM Active vs. Xtrackers High Beta | PGIM Active vs. Xtrackers Short Duration | PGIM Active vs. FlexShares High Yield | PGIM Active vs. Franklin Liberty High |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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