Correlation Between IShares IBoxx and PGIM ETF
Can any of the company-specific risk be diversified away by investing in both IShares IBoxx 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 IShares IBoxx and PGIM ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares iBoxx Investment and PGIM ETF Trust, you can compare the effects of market volatilities on IShares IBoxx 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 IShares IBoxx with a short position of PGIM ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares IBoxx and PGIM ETF.
Diversification Opportunities for IShares IBoxx and PGIM ETF
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and PGIM is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares iBoxx Investment 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 IShares IBoxx 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 iShares iBoxx Investment 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 IShares IBoxx i.e., IShares IBoxx and PGIM ETF go up and down completely randomly.
Pair Corralation between IShares IBoxx and PGIM ETF
Considering the 90-day investment horizon iShares iBoxx Investment is expected to generate 1.46 times more return on investment than PGIM ETF. However, IShares IBoxx is 1.46 times more volatile than PGIM ETF Trust. It trades about -0.01 of its potential returns per unit of risk. PGIM ETF Trust is currently generating about -0.05 per unit of risk. If you would invest 11,032 in iShares iBoxx Investment on August 29, 2024 and sell it today you would lose (45.00) from holding iShares iBoxx Investment or give up 0.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares iBoxx Investment vs. PGIM ETF Trust
Performance |
| Timeline |
| iShares iBoxx Investment |
| PGIM ETF Trust |
IShares IBoxx and PGIM ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares IBoxx and PGIM ETF
The main advantage of trading using opposite IShares IBoxx and PGIM ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares IBoxx 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.| IShares IBoxx vs. iShares iBoxx High | IShares IBoxx vs. iShares 1 3 Year | IShares IBoxx vs. iShares TIPS Bond | IShares IBoxx vs. iShares 7 10 Year |
| PGIM ETF vs. Old Point Financial | PGIM ETF vs. Peoples Bancorp of | PGIM ETF vs. RiverFront Strategic Income |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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