Correlation Between NYSE Composite and Pgim Securitized
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Pgim Securitized 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 NYSE Composite and Pgim Securitized into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Pgim Securitized Credit, you can compare the effects of market volatilities on NYSE Composite and Pgim Securitized 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 NYSE Composite with a short position of Pgim Securitized. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Pgim Securitized.
Diversification Opportunities for NYSE Composite and Pgim Securitized
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Pgim is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Pgim Securitized Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Securitized Credit and NYSE Composite 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 NYSE Composite are associated (or correlated) with Pgim Securitized. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pgim Securitized Credit has no effect on the direction of NYSE Composite i.e., NYSE Composite and Pgim Securitized go up and down completely randomly.
Pair Corralation between NYSE Composite and Pgim Securitized
Assuming the 90 days trading horizon NYSE Composite is expected to generate 4.96 times more return on investment than Pgim Securitized. However, NYSE Composite is 4.96 times more volatile than Pgim Securitized Credit. It trades about 0.19 of its potential returns per unit of risk. Pgim Securitized Credit is currently generating about 0.21 per unit of risk. If you would invest 1,956,073 in NYSE Composite on August 25, 2024 and sell it today you would earn a total of 56,272 from holding NYSE Composite or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Pgim Securitized Credit
Performance |
| Timeline |
NYSE Composite and Pgim Securitized Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Pgim Securitized Credit
Pair trading matchups for Pgim Securitized
Pair Trading with NYSE Composite and Pgim Securitized
The main advantage of trading using opposite NYSE Composite and Pgim Securitized positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Pgim Securitized 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 Securitized will offset losses from the drop in Pgim Securitized's long position.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
| Pgim Securitized vs. Artisan Global Unconstrained | Pgim Securitized vs. T Rowe Price | Pgim Securitized vs. Kinetics Global Fund | Pgim Securitized vs. Rbb Fund Trust |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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