Correlation Between PGIM ETF and IShares IBoxx
Can any of the company-specific risk be diversified away by investing in both PGIM ETF and IShares IBoxx 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 PGIM ETF and IShares IBoxx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PGIM ETF Trust and iShares iBoxx Investment, you can compare the effects of market volatilities on PGIM ETF and IShares IBoxx 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 PGIM ETF with a short position of IShares IBoxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of PGIM ETF and IShares IBoxx.
Diversification Opportunities for PGIM ETF and IShares IBoxx
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between PGIM and IShares is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding PGIM ETF Trust and iShares iBoxx Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares iBoxx Investment and PGIM ETF 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 PGIM ETF Trust are associated (or correlated) with IShares IBoxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares iBoxx Investment has no effect on the direction of PGIM ETF i.e., PGIM ETF and IShares IBoxx go up and down completely randomly.
Pair Corralation between PGIM ETF and IShares IBoxx
Considering the 90-day investment horizon PGIM ETF is expected to generate 1.19 times less return on investment than IShares IBoxx. But when comparing it to its historical volatility, PGIM ETF Trust is 1.34 times less risky than IShares IBoxx. It trades about 0.1 of its potential returns per unit of risk. iShares iBoxx Investment is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 10,531 in iShares iBoxx Investment on September 1, 2024 and sell it today you would earn a total of 524.00 from holding iShares iBoxx Investment or generate 4.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
PGIM ETF Trust vs. iShares iBoxx Investment
Performance |
| Timeline |
| PGIM ETF Trust |
| iShares iBoxx Investment |
PGIM ETF and IShares IBoxx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PGIM ETF and IShares IBoxx
The main advantage of trading using opposite PGIM ETF and IShares IBoxx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PGIM ETF position performs unexpectedly, IShares IBoxx 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 IShares IBoxx will offset losses from the drop in IShares IBoxx's long position.| PGIM ETF vs. Old Point Financial | PGIM ETF vs. Peoples Bancorp of | PGIM ETF vs. RiverFront Strategic Income |
| IShares IBoxx vs. iShares ESG USD | IShares IBoxx vs. FlexShares Disciplined Duration | IShares IBoxx vs. iShares ESG 1 5 | IShares IBoxx vs. First Trust Emerging |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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