Correlation Between Pgim Securitized and Prudential Tips

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

By analyzing existing cross correlation between Pgim Securitized Credit and Prudential Tips, you can compare the effects of market volatilities on Pgim Securitized and Prudential Tips 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 Securitized with a short position of Prudential Tips. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pgim Securitized and Prudential Tips.

Diversification Opportunities for Pgim Securitized and Prudential Tips

-0.74

Correlation Coefficient

Pgim Securitized  Prudential Tips

Pay attention - limited upside

The 3 months correlation between Pgim and Prudential is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Pgim Securitized Credit and Prudential Tips in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Tips and Pgim Securitized 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 Securitized Credit are associated (or correlated) with Prudential Tips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Tips has no effect on the direction of Pgim Securitized i.e., Pgim Securitized and Prudential Tips go up and down completely randomly.

Pair Corralation between Pgim Securitized and Prudential Tips

Assuming the 90 days horizon Pgim Securitized Credit is not expected to generate positive returns. However, Pgim Securitized Credit is 7.79 times less risky than Prudential Tips. It waists most of its returns potential to compensate for thr risk taken. Prudential Tips is generating about -0.25 per unit of risk. If you would invest  974.00  in Pgim Securitized Credit on September 27, 2024 and sell it today you would earn a total of  0.00  from holding Pgim Securitized Credit or generate 0.0% return on investment over 90 days.

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

Pgim Securitized Credit  vs.  Prudential Tips

Pgim Securitized Credit

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pgim Securitized Credit are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pgim Securitized is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Prudential Tips

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prudential Tips has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Prudential Tips 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 Securitized and Prudential Tips

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

The idea behind Pgim Securitized Credit and Prudential Tips 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.