Correlation Between Pgim Global and Aama Equity
Can any of the company-specific risk be diversified away by investing in both Pgim Global and Aama Equity 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 Global and Aama Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pgim Global High and Aama Equity Fund, you can compare the effects of market volatilities on Pgim Global and Aama Equity 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 Global with a short position of Aama Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pgim Global and Aama Equity.
Diversification Opportunities for Pgim Global and Aama Equity
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pgim and Aama is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Pgim Global High and Aama Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aama Equity Fund and Pgim Global 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 Global High are associated (or correlated) with Aama Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aama Equity Fund has no effect on the direction of Pgim Global i.e., Pgim Global and Aama Equity go up and down completely randomly.
Pair Corralation between Pgim Global and Aama Equity
Considering the 90-day investment horizon Pgim Global High is expected to generate 1.07 times more return on investment than Aama Equity. However, Pgim Global is 1.07 times more volatile than Aama Equity Fund. It trades about 0.07 of its potential returns per unit of risk. Aama Equity Fund is currently generating about 0.03 per unit of risk. If you would invest 1,148 in Pgim Global High on February 5, 2024 and sell it today you would earn a total of 21.00 from holding Pgim Global High or generate 1.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Pgim Global High vs. Aama Equity Fund
Performance |
Timeline |
Pgim Global High |
Aama Equity Fund |
Pgim Global and Aama Equity Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pgim Global and Aama Equity
The main advantage of trading using opposite Pgim Global and Aama Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pgim Global position performs unexpectedly, Aama Equity 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 Aama Equity will offset losses from the drop in Aama Equity's long position.Pgim Global vs. John Hancock Income | Pgim Global vs. MFS High Income | Pgim Global vs. MFS Investment Grade | Pgim Global vs. AllianzGI Convertible Income |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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