Correlation Between Alpha Architect and PGIM ETF
Can any of the company-specific risk be diversified away by investing in both Alpha Architect 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 Alpha Architect and PGIM ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha Architect Global and PGIM ETF Trust, you can compare the effects of market volatilities on Alpha Architect 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 Alpha Architect with a short position of PGIM ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Architect and PGIM ETF.
Diversification Opportunities for Alpha Architect and PGIM ETF
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alpha and PGIM is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Architect Global 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 Alpha Architect 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 Alpha Architect Global 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 Alpha Architect i.e., Alpha Architect and PGIM ETF go up and down completely randomly.
Pair Corralation between Alpha Architect and PGIM ETF
Given the investment horizon of 90 days Alpha Architect is expected to generate 1.16 times less return on investment than PGIM ETF. But when comparing it to its historical volatility, Alpha Architect Global is 1.01 times less risky than PGIM ETF. It trades about 0.13 of its potential returns per unit of risk. PGIM ETF Trust is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 7,705 in PGIM ETF Trust on September 2, 2025 and sell it today you would earn a total of 590.00 from holding PGIM ETF Trust or generate 7.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.46% |
| Values | Daily Returns |
Alpha Architect Global vs. PGIM ETF Trust
Performance |
| Timeline |
| Alpha Architect Global |
| PGIM ETF Trust |
Alpha Architect and PGIM ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpha Architect and PGIM ETF
The main advantage of trading using opposite Alpha Architect and PGIM ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Architect 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.| Alpha Architect vs. Series Portfolios Trust | Alpha Architect vs. First Trust Multi Asset | Alpha Architect vs. Collaborative Investment Series | Alpha Architect vs. Northern Lights |
| PGIM ETF vs. FT Vest Equity | PGIM ETF vs. Northern Lights | PGIM ETF vs. Diamond Hill Funds | PGIM ETF vs. Dimensional International High |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |