Correlation Between IShares Short and PGIM ETF
Can any of the company-specific risk be diversified away by investing in both IShares Short and PGIM ETF 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 IShares Short and PGIM ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Short Treasury and PGIM ETF Trust, you can compare the effects of market volatilities on IShares Short and PGIM ETF 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 IShares Short with a short position of PGIM ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Short and PGIM ETF.
Diversification Opportunities for IShares Short and PGIM ETF
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and PGIM is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares Short Treasury and PGIM ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGIM ETF Trust and IShares 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 iShares Short Treasury are associated (or correlated) with PGIM ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGIM ETF Trust has no effect on the direction of IShares Short i.e., IShares Short and PGIM ETF go up and down completely randomly.
Pair Corralation between IShares Short and PGIM ETF
Considering the 90-day investment horizon IShares Short is expected to generate 1.75 times less return on investment than PGIM ETF. But when comparing it to its historical volatility, iShares Short Treasury is 3.02 times less risky than PGIM ETF. It trades about 1.04 of its potential returns per unit of risk. PGIM ETF Trust is currently generating about 0.61 of returns per unit of risk over similar time horizon. If you would invest 5,100 in PGIM ETF Trust on August 25, 2024 and sell it today you would earn a total of 35.00 from holding PGIM ETF Trust or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Short Treasury vs. PGIM ETF Trust
Performance |
| Timeline |
| iShares Short Treasury |
| PGIM ETF Trust |
IShares Short and PGIM ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Short and PGIM ETF
The main advantage of trading using opposite IShares Short and PGIM ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Short position performs unexpectedly, PGIM ETF 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 PGIM ETF will offset losses from the drop in PGIM ETF's long position.| IShares Short vs. First Trust Low | IShares Short vs. First Trust Senior | IShares Short vs. First Trust TCW | IShares Short vs. First Trust Tactical |
| PGIM ETF vs. First Trust Exchange Traded | PGIM ETF vs. Vanguard Intermediate Term Treasury | PGIM ETF vs. Vanguard Long Term Treasury | PGIM ETF vs. Vanguard Short Term Treasury |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |