Correlation Between SPDR SP and PGIM ETF
Can any of the company-specific risk be diversified away by investing in both SPDR SP 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 SPDR SP and PGIM ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP MIDCAP and PGIM ETF Trust, you can compare the effects of market volatilities on SPDR SP 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 SPDR SP with a short position of PGIM ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and PGIM ETF.
Diversification Opportunities for SPDR SP and PGIM ETF
Almost no diversification
The 3 months correlation between SPDR and PGIM is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP MIDCAP 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 SPDR SP 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 SP MIDCAP 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 SPDR SP i.e., SPDR SP and PGIM ETF go up and down completely randomly.
Pair Corralation between SPDR SP and PGIM ETF
Considering the 90-day investment horizon SPDR SP is expected to generate 1.3 times less return on investment than PGIM ETF. In addition to that, SPDR SP is 1.18 times more volatile than PGIM ETF Trust. It trades about 0.11 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 5,228 in PGIM ETF Trust on September 1, 2024 and sell it today you would earn a total of 1,042 from holding PGIM ETF Trust or generate 19.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
SPDR SP MIDCAP vs. PGIM ETF Trust
Performance |
| Timeline |
| SPDR SP MIDCAP |
| PGIM ETF Trust |
SPDR SP and PGIM ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and PGIM ETF
The main advantage of trading using opposite SPDR SP and PGIM ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP 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.| SPDR SP vs. iShares Core SP | SPDR SP vs. iShares Russell 2000 | SPDR SP vs. iShares MSCI EAFE | SPDR SP vs. iShares Russell 2000 |
| PGIM ETF vs. iShares Small Cap | PGIM ETF vs. Invesco ESG NASDAQ | PGIM ETF vs. Invesco ESG NASDAQ | PGIM ETF vs. BlackRock Carbon Transition |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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