Correlation Between Pgim High and Fidelity New
Can any of the company-specific risk be diversified away by investing in both Pgim High and Fidelity New 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 High and Fidelity New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pgim High Yield and Fidelity New Markets, you can compare the effects of market volatilities on Pgim High and Fidelity New 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 High with a short position of Fidelity New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pgim High and Fidelity New.
Diversification Opportunities for Pgim High and Fidelity New
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pgim and Fidelity is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Pgim High Yield and Fidelity New Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity New Markets and Pgim High 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 High Yield are associated (or correlated) with Fidelity New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity New Markets has no effect on the direction of Pgim High i.e., Pgim High and Fidelity New go up and down completely randomly.
Pair Corralation between Pgim High and Fidelity New
Assuming the 90 days horizon Pgim High is expected to generate 1.06 times less return on investment than Fidelity New. But when comparing it to its historical volatility, Pgim High Yield is 1.32 times less risky than Fidelity New. It trades about 0.12 of its potential returns per unit of risk. Fidelity New Markets is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,074 in Fidelity New Markets on September 12, 2024 and sell it today you would earn a total of 226.00 from holding Fidelity New Markets or generate 21.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pgim High Yield vs. Fidelity New Markets
Performance |
| Timeline |
| Pgim High Yield |
| Fidelity New Markets |
Pgim High and Fidelity New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pgim High and Fidelity New
The main advantage of trading using opposite Pgim High and Fidelity New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pgim High position performs unexpectedly, Fidelity New 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 Fidelity New will offset losses from the drop in Fidelity New's long position.| Pgim High vs. Calamos Dynamic Convertible | Pgim High vs. Rationalpier 88 Convertible | Pgim High vs. Advent Claymore Convertible | Pgim High vs. Absolute Convertible Arbitrage |
| Fidelity New vs. Fidelity New Markets | Fidelity New vs. Fidelity New Markets | Fidelity New vs. SCOR PK | Fidelity New vs. Morningstar Unconstrained Allocation |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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