Correlation Between Xtrackers Short and PGIM Active
Can any of the company-specific risk be diversified away by investing in both Xtrackers Short and PGIM Active 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 Xtrackers Short and PGIM Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers Short Duration and PGIM Active High, you can compare the effects of market volatilities on Xtrackers Short and PGIM Active 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 Xtrackers Short with a short position of PGIM Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Short and PGIM Active.
Diversification Opportunities for Xtrackers Short and PGIM Active
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xtrackers and PGIM is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Short Duration and PGIM Active High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGIM Active High and Xtrackers 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 Xtrackers Short Duration are associated (or correlated) with PGIM Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGIM Active High has no effect on the direction of Xtrackers Short i.e., Xtrackers Short and PGIM Active go up and down completely randomly.
Pair Corralation between Xtrackers Short and PGIM Active
Given the investment horizon of 90 days Xtrackers Short is expected to generate 1.07 times less return on investment than PGIM Active. But when comparing it to its historical volatility, Xtrackers Short Duration is 1.03 times less risky than PGIM Active. It trades about 0.33 of its potential returns per unit of risk. PGIM Active High is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 3,451 in PGIM Active High on October 20, 2024 and sell it today you would earn a total of 60.00 from holding PGIM Active High or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers Short Duration vs. PGIM Active High
Performance |
| Timeline |
| Xtrackers Short Duration |
| PGIM Active High |
Xtrackers Short and PGIM Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers Short and PGIM Active
The main advantage of trading using opposite Xtrackers Short and PGIM Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Short position performs unexpectedly, PGIM Active 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 Active will offset losses from the drop in PGIM Active's long position.| Xtrackers Short vs. Xtrackers High Beta | Xtrackers Short vs. Xtrackers Low Beta | Xtrackers Short vs. iShares Edge High | Xtrackers Short vs. PGIM Active High |
| PGIM Active vs. Xtrackers High Beta | PGIM Active vs. Xtrackers Short Duration | PGIM Active vs. FlexShares High Yield | PGIM Active vs. Franklin Liberty High |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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