Correlation Between Pgim High and Axs Adaptive

Can any of the company-specific risk be diversified away by investing in both Pgim High and Axs Adaptive 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 High and Axs Adaptive into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pgim High Yield and Axs Adaptive Plus, you can compare the effects of market volatilities on Pgim High and Axs Adaptive 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 High with a short position of Axs Adaptive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pgim High and Axs Adaptive.

Diversification Opportunities for Pgim High and Axs Adaptive

0.03

Correlation Coefficient

Pgim High  Axs Adaptive

Significant diversification

The 3 months correlation between Pgim and Axs is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Pgim High Yield and Axs Adaptive Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axs Adaptive Plus and Pgim High 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 High Yield are associated (or correlated) with Axs Adaptive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axs Adaptive Plus has no effect on the direction of Pgim High i.e., Pgim High and Axs Adaptive go up and down completely randomly.

Pair Corralation between Pgim High and Axs Adaptive

Considering the 90-day investment horizon Pgim High Yield is expected to generate 0.97 times more return on investment than Axs Adaptive. However, Pgim High Yield is 1.03 times less risky than Axs Adaptive. It trades about 0.0 of its potential returns per unit of risk. Axs Adaptive Plus is currently generating about -0.16 per unit of risk. If you would invest  1,378  in Pgim High Yield on October 7, 2024 and sell it today you would lose (3.00) from holding Pgim High Yield or give up 0.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Pgim High Yield  vs.  Axs Adaptive Plus

Pgim High Yield

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pgim High Yield are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound basic indicators, Pgim High is not utilizing all of its potentials. The new stock price tumult, may contribute to shorter-term losses for the shareholders.

Axs Adaptive Plus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Axs Adaptive Plus has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Axs Adaptive is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pgim High and Axs Adaptive

The main advantage of trading using opposite Pgim High and Axs Adaptive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pgim High position performs unexpectedly, Axs Adaptive 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 Axs Adaptive will offset losses from the drop in Axs Adaptive's long position.

The idea behind Pgim High Yield and Axs Adaptive Plus pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.