Correlation Between Pgim Securitized and Short Real

Can any of the company-specific risk be diversified away by investing in both Pgim Securitized and Short Real 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 Short Real 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 Short Real Estate, you can compare the effects of market volatilities on Pgim Securitized and Short Real 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 Short Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pgim Securitized and Short Real.

Diversification Opportunities for Pgim Securitized and Short Real

-0.7

Correlation Coefficient

Pgim Securitized  Short Real

Excellent diversification

The 3 months correlation between Pgim and Short is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Pgim Securitized Credit and Short Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Real Estate 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 Short Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Real Estate has no effect on the direction of Pgim Securitized i.e., Pgim Securitized and Short Real go up and down completely randomly.

Pair Corralation between Pgim Securitized and Short Real

Assuming the 90 days horizon Pgim Securitized Credit is expected to generate 0.11 times more return on investment than Short Real. However, Pgim Securitized Credit is 8.85 times less risky than Short Real. It trades about 0.17 of its potential returns per unit of risk. Short Real Estate is currently generating about -0.03 per unit of risk. If you would invest  960.00  in Pgim Securitized Credit on December 27, 2024 and sell it today you would earn a total of  12.00  from holding Pgim Securitized Credit or generate 1.25% 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.  Short Real Estate

Pgim Securitized Credit

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pgim Securitized Credit are ranked lower than 13 (%) 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.

Short Real Estate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Short Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Short Real 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 Short Real

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

The idea behind Pgim Securitized Credit and Short Real Estate 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 Stocks Directory module to find actively traded stocks across global markets.