Correlation Between Dana Large and Pgim Esg
Can any of the company-specific risk be diversified away by investing in both Dana Large and Pgim Esg 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 Dana Large and Pgim Esg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dana Large Cap and Pgim Esg High, you can compare the effects of market volatilities on Dana Large and Pgim Esg 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 Dana Large with a short position of Pgim Esg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana Large and Pgim Esg.
Diversification Opportunities for Dana Large and Pgim Esg
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dana and Pgim is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dana Large Cap and Pgim Esg High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Esg High and Dana Large 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 Dana Large Cap are associated (or correlated) with Pgim Esg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pgim Esg High has no effect on the direction of Dana Large i.e., Dana Large and Pgim Esg go up and down completely randomly.
Pair Corralation between Dana Large and Pgim Esg
Assuming the 90 days horizon Dana Large Cap is expected to generate 2.54 times more return on investment than Pgim Esg. However, Dana Large is 2.54 times more volatile than Pgim Esg High. It trades about 0.11 of its potential returns per unit of risk. Pgim Esg High is currently generating about 0.13 per unit of risk. If you would invest 1,756 in Dana Large Cap on September 15, 2024 and sell it today you would earn a total of 948.00 from holding Dana Large Cap or generate 53.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Dana Large Cap vs. Pgim Esg High
Performance |
Timeline |
Dana Large Cap |
Pgim Esg High |
Dana Large and Pgim Esg Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dana Large and Pgim Esg
The main advantage of trading using opposite Dana Large and Pgim Esg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana Large position performs unexpectedly, Pgim Esg 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 Esg will offset losses from the drop in Pgim Esg's long position.Dana Large vs. Rbc Emerging Markets | Dana Large vs. Transamerica Emerging Markets | Dana Large vs. Shelton Emerging Markets | Dana Large vs. Barings Emerging Markets |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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