Correlation Between PGIM Short and Munivest Fund
Can any of the company-specific risk be diversified away by investing in both PGIM Short and Munivest Fund 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 Munivest Fund 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 Munivest Fund, you can compare the effects of market volatilities on PGIM Short and Munivest Fund 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 Munivest Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of PGIM Short and Munivest Fund.
Diversification Opportunities for PGIM Short and Munivest Fund
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between PGIM and Munivest is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding PGIM Short Duration and Munivest Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Munivest Fund 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 Munivest Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Munivest Fund has no effect on the direction of PGIM Short i.e., PGIM Short and Munivest Fund go up and down completely randomly.
Pair Corralation between PGIM Short and Munivest Fund
Given the investment horizon of 90 days PGIM Short Duration is expected to generate 0.66 times more return on investment than Munivest Fund. However, PGIM Short Duration is 1.51 times less risky than Munivest Fund. It trades about 0.03 of its potential returns per unit of risk. Munivest Fund is currently generating about -0.07 per unit of risk. If you would invest 1,650 in PGIM Short Duration on August 29, 2024 and sell it today you would earn a total of 9.00 from holding PGIM Short Duration or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PGIM Short Duration vs. Munivest Fund
Performance |
| Timeline |
| PGIM Short Duration |
| Munivest Fund |
PGIM Short and Munivest Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PGIM Short and Munivest Fund
The main advantage of trading using opposite PGIM Short and Munivest Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PGIM Short position performs unexpectedly, Munivest Fund 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 Munivest Fund will offset losses from the drop in Munivest Fund's long position.| PGIM Short vs. Invesco High Income | PGIM Short vs. Blackrock Muniholdings Ny | PGIM Short vs. Nuveen California Select | PGIM Short vs. MFS Investment Grade |
| Munivest Fund vs. Gabelli Global Small | Munivest Fund vs. MFS Investment Grade | Munivest Fund vs. Eaton Vance National | Munivest Fund vs. GAMCO Natural Resources |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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