Correlation Between Gmo High and Pgim Securitized
Can any of the company-specific risk be diversified away by investing in both Gmo High and Pgim Securitized 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 Gmo High and Pgim Securitized into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo High Yield and Pgim Securitized Credit, you can compare the effects of market volatilities on Gmo High and Pgim Securitized 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 Gmo High with a short position of Pgim Securitized. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo High and Pgim Securitized.
Diversification Opportunities for Gmo High and Pgim Securitized
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gmo and Pgim is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Gmo High Yield and Pgim Securitized Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Securitized Credit and Gmo High 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 Gmo High Yield are associated (or correlated) with Pgim Securitized. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pgim Securitized Credit has no effect on the direction of Gmo High i.e., Gmo High and Pgim Securitized go up and down completely randomly.
Pair Corralation between Gmo High and Pgim Securitized
Assuming the 90 days horizon Gmo High Yield is expected to generate 2.06 times more return on investment than Pgim Securitized. However, Gmo High is 2.06 times more volatile than Pgim Securitized Credit. It trades about 0.37 of its potential returns per unit of risk. Pgim Securitized Credit is currently generating about 0.35 per unit of risk. If you would invest 1,661 in Gmo High Yield on April 14, 2025 and sell it today you would earn a total of 95.00 from holding Gmo High Yield or generate 5.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo High Yield vs. Pgim Securitized Credit
Performance |
| Timeline |
| Gmo High Yield |
| Pgim Securitized Credit |
Gmo High and Pgim Securitized Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo High and Pgim Securitized
The main advantage of trading using opposite Gmo High and Pgim Securitized positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo High position performs unexpectedly, Pgim Securitized 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 Securitized will offset losses from the drop in Pgim Securitized's long position.| Gmo High vs. Fpa Queens Road | Gmo High vs. Federated Clover Small | Gmo High vs. Ab Small Cap | Gmo High vs. Lsv Small Cap |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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