Correlation Between PGIM Active and SHP ETF
Can any of the company-specific risk be diversified away by investing in both PGIM Active and SHP 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 PGIM Active and SHP ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PGIM Active High and SHP ETF Trust, you can compare the effects of market volatilities on PGIM Active and SHP 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 PGIM Active with a short position of SHP ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of PGIM Active and SHP ETF.
Diversification Opportunities for PGIM Active and SHP ETF
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PGIM and SHP is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding PGIM Active High and SHP ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHP ETF Trust and PGIM Active 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 Active High are associated (or correlated) with SHP ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHP ETF Trust has no effect on the direction of PGIM Active i.e., PGIM Active and SHP ETF go up and down completely randomly.
Pair Corralation between PGIM Active and SHP ETF
Given the investment horizon of 90 days PGIM Active High is expected to generate 0.73 times more return on investment than SHP ETF. However, PGIM Active High is 1.38 times less risky than SHP ETF. It trades about 0.16 of its potential returns per unit of risk. SHP ETF Trust is currently generating about 0.06 per unit of risk. If you would invest 3,229 in PGIM Active High on December 4, 2024 and sell it today you would earn a total of 315.00 from holding PGIM Active High or generate 9.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 99.59% |
Values | Daily Returns |
PGIM Active High vs. SHP ETF Trust
Performance |
Timeline |
PGIM Active High |
SHP ETF Trust |
PGIM Active and SHP ETF Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PGIM Active and SHP ETF
The main advantage of trading using opposite PGIM Active and SHP ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PGIM Active position performs unexpectedly, SHP 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 SHP ETF will offset losses from the drop in SHP ETF's long position.PGIM Active vs. Xtrackers High Beta | PGIM Active vs. Xtrackers Short Duration | PGIM Active vs. FlexShares High Yield | PGIM Active vs. Franklin Liberty High |
SHP ETF vs. Strategy Shares | SHP ETF vs. Freedom Day Dividend | SHP ETF vs. Franklin Templeton ETF | SHP ETF vs. iShares MSCI China |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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