Correlation Between PGIM Short and Western Asset
Can any of the company-specific risk be diversified away by investing in both PGIM Short and Western Asset 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 Western Asset 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 Western Asset Global, you can compare the effects of market volatilities on PGIM Short and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of PGIM Short and Western Asset.
Diversification Opportunities for PGIM Short and Western Asset
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PGIM and Western is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding PGIM Short Duration and Western Asset Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Global 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Global has no effect on the direction of PGIM Short i.e., PGIM Short and Western Asset go up and down completely randomly.
Pair Corralation between PGIM Short and Western Asset
Given the investment horizon of 90 days PGIM Short Duration is expected to generate 0.9 times more return on investment than Western Asset. However, PGIM Short Duration is 1.11 times less risky than Western Asset. It trades about 0.15 of its potential returns per unit of risk. Western Asset Global is currently generating about -0.19 per unit of risk. If you would invest 1,585 in PGIM Short Duration on September 12, 2024 and sell it today you would earn a total of 72.00 from holding PGIM Short Duration or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PGIM Short Duration vs. Western Asset Global
Performance |
| Timeline |
| PGIM Short Duration |
| Western Asset Global |
PGIM Short and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PGIM Short and Western Asset
The main advantage of trading using opposite PGIM Short and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PGIM Short position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset'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 |
| Western Asset vs. Western Asset High | Western Asset vs. Western Asset Global | Western Asset vs. European Equity Closed | Western Asset vs. Doubleline Opportunistic Credit |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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