Correlation Between Vanguard International and PGIM ETF

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

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

Diversification Opportunities for Vanguard International and PGIM ETF

0.0

Correlation Coefficient

Vanguard International  PGIM ETF

Pay attention - limited upside

The 3 months correlation between Vanguard and PGIM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard International Dividen and PGIM ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGIM ETF Trust and Vanguard International 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 Vanguard International Dividend are associated (or correlated) with PGIM ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGIM ETF Trust has no effect on the direction of Vanguard International i.e., Vanguard International and PGIM ETF go up and down completely randomly.

Pair Corralation between Vanguard International and PGIM ETF

If you would invest  7,953  in Vanguard International Dividend on December 29, 2024 and sell it today you would earn a total of  373.00  from holding Vanguard International Dividend or generate 4.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

Vanguard International Dividen  vs.  PGIM ETF Trust

Vanguard International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard International Dividend are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, Vanguard International is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

PGIM ETF Trust

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Vanguard International and PGIM ETF

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

The idea behind Vanguard International Dividend and PGIM ETF Trust 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.