Correlation Between PGIM ETF and Dow Jones
Can any of the company-specific risk be diversified away by investing in both PGIM ETF and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on PGIM ETF and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of PGIM ETF and Dow Jones.
Diversification Opportunities for PGIM ETF and Dow Jones
Excellent diversification
The 3 months correlation between PGIM and Dow is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding PGIM ETF Trust and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of PGIM ETF i.e., PGIM ETF and Dow Jones go up and down completely randomly.
Pair Corralation between PGIM ETF and Dow Jones
Given the investment horizon of 90 days PGIM ETF Trust is expected to under-perform the Dow Jones. But the etf apears to be less risky and, when comparing its historical volatility, PGIM ETF Trust is 2.47 times less risky than Dow Jones. The etf trades about -0.1 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 4,233,015 in Dow Jones Industrial on August 30, 2024 and sell it today you would earn a total of 239,191 from holding Dow Jones Industrial or generate 5.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PGIM ETF Trust vs. Dow Jones Industrial
Performance |
| Timeline |
PGIM ETF and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
PGIM ETF Trust
Pair trading matchups for PGIM ETF
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with PGIM ETF and Dow Jones
The main advantage of trading using opposite PGIM ETF and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PGIM ETF position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| PGIM ETF vs. SSGA Active Trust | PGIM ETF vs. BlackRock Intermediate Muni | PGIM ETF vs. iShares BBB Rated | PGIM ETF vs. Xtrackers Short Duration |
| Dow Jones vs. Skillful Craftsman Education | Dow Jones vs. Acco Brands | Dow Jones vs. Cracker Barrel Old | Dow Jones vs. Coursera |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |