Correlation Between IShares IBoxx and PGIM Active
Can any of the company-specific risk be diversified away by investing in both IShares IBoxx 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 IShares IBoxx and PGIM Active 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 Active High, you can compare the effects of market volatilities on IShares IBoxx 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 IShares IBoxx with a short position of PGIM Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares IBoxx and PGIM Active.
Diversification Opportunities for IShares IBoxx and PGIM Active
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between IShares and PGIM is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding iShares iBoxx Investment 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 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 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 IShares IBoxx i.e., IShares IBoxx and PGIM Active go up and down completely randomly.
Pair Corralation between IShares IBoxx and PGIM Active
Considering the 90-day investment horizon iShares iBoxx Investment is expected to generate 2.31 times more return on investment than PGIM Active. However, IShares IBoxx is 2.31 times more volatile than PGIM Active High. It trades about 0.1 of its potential returns per unit of risk. PGIM Active High is currently generating about 0.13 per unit of risk. If you would invest 10,926 in iShares iBoxx Investment on September 12, 2024 and sell it today you would earn a total of 99.00 from holding iShares iBoxx Investment or generate 0.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares iBoxx Investment vs. PGIM Active High
Performance |
| Timeline |
| iShares iBoxx Investment |
| PGIM Active High |
IShares IBoxx and PGIM Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares IBoxx and PGIM Active
The main advantage of trading using opposite IShares IBoxx and PGIM Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares IBoxx 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.| IShares IBoxx vs. American Century STOXX | IShares IBoxx vs. Franklin Liberty Investment | IShares IBoxx vs. Aquagold International | IShares IBoxx vs. Morningstar Unconstrained Allocation |
| PGIM Active vs. Rivernorth Opportunistic Municipalome | PGIM Active vs. MFS Investment Grade | PGIM Active vs. Blackrock Muniholdings Ny | PGIM Active vs. Blackrock Muniholdings Closed |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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