Correlation Between Pgim High and Thornburg Intermediate
Can any of the company-specific risk be diversified away by investing in both Pgim High and Thornburg Intermediate 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 Thornburg Intermediate 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 Thornburg Intermediate Municipal, you can compare the effects of market volatilities on Pgim High and Thornburg Intermediate 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 Thornburg Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pgim High and Thornburg Intermediate.
Diversification Opportunities for Pgim High and Thornburg Intermediate
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pgim and Thornburg is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Pgim High Yield and Thornburg Intermediate Municip in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Intermediate 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 Thornburg Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Intermediate has no effect on the direction of Pgim High i.e., Pgim High and Thornburg Intermediate go up and down completely randomly.
Pair Corralation between Pgim High and Thornburg Intermediate
Assuming the 90 days horizon Pgim High is expected to generate 4.12 times less return on investment than Thornburg Intermediate. But when comparing it to its historical volatility, Pgim High Yield is 1.46 times less risky than Thornburg Intermediate. It trades about 0.07 of its potential returns per unit of risk. Thornburg Intermediate Municipal is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,323 in Thornburg Intermediate Municipal on September 4, 2024 and sell it today you would earn a total of 12.00 from holding Thornburg Intermediate Municipal or generate 0.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Pgim High Yield vs. Thornburg Intermediate Municip
Performance |
| Timeline |
| Pgim High Yield |
| Thornburg Intermediate |
Pgim High and Thornburg Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pgim High and Thornburg Intermediate
The main advantage of trading using opposite Pgim High and Thornburg Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pgim High position performs unexpectedly, Thornburg Intermediate 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 Thornburg Intermediate will offset losses from the drop in Thornburg Intermediate's long position.| Pgim High vs. Prudential Total Return | Pgim High vs. Metropolitan West Total | Pgim High vs. John Hancock Disciplined | Pgim High vs. Europacific Growth Fund |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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