Correlation Between PGIM ETF and Highland Capital

Can any of the company-specific risk be diversified away by investing in both PGIM ETF and Highland Capital 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 ETF and Highland Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PGIM ETF Trust and Highland Capital Management, you can compare the effects of market volatilities on PGIM ETF and Highland Capital 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 ETF with a short position of Highland Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of PGIM ETF and Highland Capital.

Diversification Opportunities for PGIM ETF and Highland Capital

0.79

Correlation Coefficient

PGIM ETF  Highland Capital

Poor diversification

The 3 months correlation between PGIM and Highland is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding PGIM ETF Trust and Highland Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Capital Man and PGIM ETF 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 ETF Trust are associated (or correlated) with Highland Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Capital Man has no effect on the direction of PGIM ETF i.e., PGIM ETF and Highland Capital go up and down completely randomly.

Pair Corralation between PGIM ETF and Highland Capital

If you would invest  5,025  in PGIM ETF Trust on October 20, 2024 and sell it today you would earn a total of  34.00  from holding PGIM ETF Trust or generate 0.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	5.0%
Values	Daily Returns

PGIM ETF Trust  vs.  Highland Capital Management

PGIM ETF Trust

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PGIM ETF Trust are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, PGIM ETF is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Highland Capital Man

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Highland Capital Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Highland Capital is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with PGIM ETF and Highland Capital

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

The idea behind PGIM ETF Trust and Highland Capital Management 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.