Correlation Between Investment Managers and Pgim Conservative

Can any of the company-specific risk be diversified away by investing in both Investment Managers and Pgim Conservative 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 Investment Managers and Pgim Conservative into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Investment Managers Series and Pgim Conservative Retirement, you can compare the effects of market volatilities on Investment Managers and Pgim Conservative 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 Investment Managers with a short position of Pgim Conservative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment Managers and Pgim Conservative.

Diversification Opportunities for Investment Managers and Pgim Conservative

0.41

Correlation Coefficient

Investment Managers  Pgim Conservative

Very weak diversification

The 3 months correlation between Investment and Pgim is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Investment Managers Series and Pgim Conservative Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Conservative and Investment Managers 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 Investment Managers Series are associated (or correlated) with Pgim Conservative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pgim Conservative has no effect on the direction of Investment Managers i.e., Investment Managers and Pgim Conservative go up and down completely randomly.

Pair Corralation between Investment Managers and Pgim Conservative

Assuming the 90 days horizon Investment Managers Series is expected to generate 2.39 times more return on investment than Pgim Conservative. However, Investment Managers is 2.39 times more volatile than Pgim Conservative Retirement. It trades about 0.15 of its potential returns per unit of risk. Pgim Conservative Retirement is currently generating about 0.15 per unit of risk. If you would invest  1,400  in Investment Managers Series on September 3, 2024 and sell it today you would earn a total of  95.00  from holding Investment Managers Series or generate 6.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Investment Managers Series  vs.  Pgim Conservative Retirement

Investment Managers

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Investment Managers Series are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Investment Managers may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pgim Conservative

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pgim Conservative Retirement are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Pgim Conservative is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Investment Managers and Pgim Conservative

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

The idea behind Investment Managers Series and Pgim Conservative Retirement 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.