Correlation Between First Trust and PGIM Ultra
Can any of the company-specific risk be diversified away by investing in both First Trust and PGIM Ultra 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 First Trust and PGIM Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Low and PGIM Ultra Short, you can compare the effects of market volatilities on First Trust and PGIM Ultra 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 First Trust with a short position of PGIM Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and PGIM Ultra.
Diversification Opportunities for First Trust and PGIM Ultra
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and PGIM is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Low and PGIM Ultra Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGIM Ultra Short and First Trust 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 First Trust Low are associated (or correlated) with PGIM Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGIM Ultra Short has no effect on the direction of First Trust i.e., First Trust and PGIM Ultra go up and down completely randomly.
Pair Corralation between First Trust and PGIM Ultra
Given the investment horizon of 90 days First Trust is expected to generate 1.03 times less return on investment than PGIM Ultra. In addition to that, First Trust is 5.13 times more volatile than PGIM Ultra Short. It trades about 0.14 of its total potential returns per unit of risk. PGIM Ultra Short is currently generating about 0.72 per unit of volatility. If you would invest 4,684 in PGIM Ultra Short on August 27, 2024 and sell it today you would earn a total of 289.00 from holding PGIM Ultra Short or generate 6.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Low vs. PGIM Ultra Short
Performance |
| Timeline |
| First Trust Low |
| PGIM Ultra Short |
First Trust and PGIM Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and PGIM Ultra
The main advantage of trading using opposite First Trust and PGIM Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, PGIM Ultra 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 Ultra will offset losses from the drop in PGIM Ultra's long position.| First Trust vs. SPDR Barclays Short | First Trust vs. iShares Agency Bond | First Trust vs. Rbb Fund | First Trust vs. Bondbloxx ETF Trust |
| PGIM Ultra vs. First Trust Low | PGIM Ultra vs. First Trust Senior | PGIM Ultra vs. First Trust TCW | PGIM Ultra vs. First Trust Tactical |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |