Correlation Between PGIM Ultra and Global X
Can any of the company-specific risk be diversified away by investing in both PGIM Ultra and Global X 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 Ultra and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PGIM Ultra Short and Global X Social, you can compare the effects of market volatilities on PGIM Ultra and Global X 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 Ultra with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of PGIM Ultra and Global X.
Diversification Opportunities for PGIM Ultra and Global X
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PGIM and Global is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding PGIM Ultra Short and Global X Social in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Social and PGIM Ultra 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 Ultra Short are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Social has no effect on the direction of PGIM Ultra i.e., PGIM Ultra and Global X go up and down completely randomly.
Pair Corralation between PGIM Ultra and Global X
Given the investment horizon of 90 days PGIM Ultra is expected to generate 3.22 times less return on investment than Global X. But when comparing it to its historical volatility, PGIM Ultra Short is 28.3 times less risky than Global X. It trades about 0.44 of its potential returns per unit of risk. Global X Social is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,091 in Global X Social on August 30, 2024 and sell it today you would earn a total of 1,177 from holding Global X Social or generate 38.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
PGIM Ultra Short vs. Global X Social
Performance |
| Timeline |
| PGIM Ultra Short |
| Global X Social |
PGIM Ultra and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PGIM Ultra and Global X
The main advantage of trading using opposite PGIM Ultra and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PGIM Ultra position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| PGIM Ultra vs. Rbb Fund | PGIM Ultra vs. US Treasury 12 | PGIM Ultra vs. Rbb Fund | PGIM Ultra vs. Rbb Fund |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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