Correlation Between PGIM Short and Aberdeen Total
Can any of the company-specific risk be diversified away by investing in both PGIM Short and Aberdeen Total 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 Short and Aberdeen Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PGIM Short Duration and Aberdeen Total Dynamic, you can compare the effects of market volatilities on PGIM Short and Aberdeen Total 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 Short with a short position of Aberdeen Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of PGIM Short and Aberdeen Total.
Diversification Opportunities for PGIM Short and Aberdeen Total
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PGIM and Aberdeen is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding PGIM Short Duration and Aberdeen Total Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Total Dynamic and PGIM Short 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 Short Duration are associated (or correlated) with Aberdeen Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Total Dynamic has no effect on the direction of PGIM Short i.e., PGIM Short and Aberdeen Total go up and down completely randomly.
Pair Corralation between PGIM Short and Aberdeen Total
Given the investment horizon of 90 days PGIM Short Duration is expected to generate 0.84 times more return on investment than Aberdeen Total. However, PGIM Short Duration is 1.19 times less risky than Aberdeen Total. It trades about 0.01 of its potential returns per unit of risk. Aberdeen Total Dynamic is currently generating about -0.03 per unit of risk. If you would invest 1,652 in PGIM Short Duration on August 31, 2024 and sell it today you would earn a total of 1.00 from holding PGIM Short Duration or generate 0.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
PGIM Short Duration vs. Aberdeen Total Dynamic
Performance |
| Timeline |
| PGIM Short Duration |
| Aberdeen Total Dynamic |
PGIM Short and Aberdeen Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PGIM Short and Aberdeen Total
The main advantage of trading using opposite PGIM Short and Aberdeen Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PGIM Short position performs unexpectedly, Aberdeen Total 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 Aberdeen Total will offset losses from the drop in Aberdeen Total's long position.| PGIM Short vs. John Hancock Income | PGIM Short vs. MFS High Income | PGIM Short vs. MFS Investment Grade | PGIM Short vs. Blackrock Muniholdings Closed |
| Aberdeen Total vs. Aberdeen Global Premier | Aberdeen Total vs. Alliancebernstein National Municipal | Aberdeen Total vs. Aberdeen Standard Global | Aberdeen Total vs. Aberdeen Global Dynamic |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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