Correlation Between PGIM Emerging and Blackrock 6040

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Can any of the company-specific risk be diversified away by investing in both PGIM Emerging and Blackrock 6040 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 Emerging and Blackrock 6040 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PGIM Emerging Markets and Blackrock 6040 Target, you can compare the effects of market volatilities on PGIM Emerging and Blackrock 6040 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 Emerging with a short position of Blackrock 6040. Check out your portfolio center. Please also check ongoing floating volatility patterns of PGIM Emerging and Blackrock 6040.

Diversification Opportunities for PGIM Emerging and Blackrock 6040

0.9
  Correlation Coefficient

Almost no diversification

The 3 months correlation between EMDCX and Blackrock is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding PGIM Emerging Markets and Blackrock 6040 Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock 6040 Target and PGIM Emerging 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 Emerging Markets are associated (or correlated) with Blackrock 6040. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock 6040 Target has no effect on the direction of PGIM Emerging i.e., PGIM Emerging and Blackrock 6040 go up and down completely randomly.

Pair Corralation between PGIM Emerging and Blackrock 6040

Assuming the 90 days horizon PGIM Emerging Markets is expected to under-perform the Blackrock 6040. But the mutual fund apears to be less risky and, when comparing its historical volatility, PGIM Emerging Markets is 1.97 times less risky than Blackrock 6040. The mutual fund trades about -0.09 of its potential returns per unit of risk. The Blackrock 6040 Target is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  1,391  in Blackrock 6040 Target on August 29, 2022 and sell it today you would lose (91.00)  from holding Blackrock 6040 Target or give up 6.54% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

PGIM Emerging Markets  vs.  Blackrock 6040 Target

 Performance (%) 
       Timeline  
PGIM Emerging Markets 
EMDCX Performance
0 of 100
Over the last 90 days PGIM Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, PGIM Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

EMDCX Price Channel

Blackrock 6040 Target 
Blackrock Performance
0 of 100
Over the last 90 days Blackrock 6040 Target has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Blackrock 6040 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Blackrock Price Channel

PGIM Emerging and Blackrock 6040 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PGIM Emerging and Blackrock 6040

The main advantage of trading using opposite PGIM Emerging and Blackrock 6040 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PGIM Emerging position performs unexpectedly, Blackrock 6040 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 Blackrock 6040 will offset losses from the drop in Blackrock 6040's long position.
PGIM Emerging vs. Pimco Emerging Markets
The idea behind PGIM Emerging Markets and Blackrock 6040 Target 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.
Blackrock 6040 vs. American Balanced
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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