Correlation Between MegaLong Canadian and Pgim High
Can any of the company-specific risk be diversified away by investing in both MegaLong Canadian and Pgim High 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 MegaLong Canadian and Pgim High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MegaLong Canadian Banks and Pgim High Yield, you can compare the effects of market volatilities on MegaLong Canadian and Pgim High 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 MegaLong Canadian with a short position of Pgim High. Check out your portfolio center. Please also check ongoing floating volatility patterns of MegaLong Canadian and Pgim High.
Diversification Opportunities for MegaLong Canadian and Pgim High
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MegaLong and Pgim is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding MegaLong Canadian Banks and Pgim High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim High Yield and MegaLong Canadian 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 MegaLong Canadian Banks are associated (or correlated) with Pgim High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pgim High Yield has no effect on the direction of MegaLong Canadian i.e., MegaLong Canadian and Pgim High go up and down completely randomly.
Pair Corralation between MegaLong Canadian and Pgim High
Assuming the 90 days trading horizon MegaLong Canadian Banks is expected to generate 10.55 times more return on investment than Pgim High. However, MegaLong Canadian is 10.55 times more volatile than Pgim High Yield. It trades about 0.35 of its potential returns per unit of risk. Pgim High Yield is currently generating about 0.09 per unit of risk. If you would invest 2,432 in MegaLong Canadian Banks on August 15, 2025 and sell it today you would earn a total of 1,310 from holding MegaLong Canadian Banks or generate 53.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MegaLong Canadian Banks vs. Pgim High Yield
Performance |
| Timeline |
| MegaLong Canadian Banks |
| Pgim High Yield |
MegaLong Canadian and Pgim High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MegaLong Canadian and Pgim High
The main advantage of trading using opposite MegaLong Canadian and Pgim High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MegaLong Canadian position performs unexpectedly, Pgim High 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 High will offset losses from the drop in Pgim High's long position.| MegaLong Canadian vs. MegaLong Semiconductors Daily | MegaLong Canadian vs. MegaLong 20 Year | MegaLong Canadian vs. MegaLong Canadian Gold | MegaLong Canadian vs. MegaLong SP 500 |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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