Correlation Between Ambrus Core and Pgim Esg

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

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

Diversification Opportunities for Ambrus Core and Pgim Esg

0.85

Correlation Coefficient

Ambrus Core  Pgim Esg

Very poor diversification

The 3 months correlation between Ambrus and Pgim is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ambrus Core Bond and Pgim Esg High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Esg High and Ambrus Core 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 Ambrus Core Bond are associated (or correlated) with Pgim Esg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pgim Esg High has no effect on the direction of Ambrus Core i.e., Ambrus Core and Pgim Esg go up and down completely randomly.

Pair Corralation between Ambrus Core and Pgim Esg

Assuming the 90 days horizon Ambrus Core is expected to generate 1.12 times less return on investment than Pgim Esg. In addition to that, Ambrus Core is 1.22 times more volatile than Pgim Esg High. It trades about 0.18 of its total potential returns per unit of risk. Pgim Esg High is currently generating about 0.24 per unit of volatility. If you would invest  872.00  in Pgim Esg High on December 19, 2024 and sell it today you would earn a total of  19.00  from holding Pgim Esg High or generate 2.18% return on investment over 90 days.

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

Ambrus Core Bond  vs.  Pgim Esg High

Ambrus Core Bond

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ambrus Core Bond are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Ambrus Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pgim Esg High

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pgim Esg High are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pgim Esg is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ambrus Core and Pgim Esg

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

The idea behind Ambrus Core Bond and Pgim Esg High 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.