Correlation Between Balanced Strategy and Pgim Securitized

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

By analyzing existing cross correlation between Balanced Strategy Fund and Pgim Securitized Credit, you can compare the effects of market volatilities on Balanced Strategy 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 Balanced Strategy with a short position of Pgim Securitized. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Strategy and Pgim Securitized.

Diversification Opportunities for Balanced Strategy and Pgim Securitized

0.91

Correlation Coefficient

Balanced Strategy  Pgim Securitized

Almost no diversification

The 3 months correlation between Balanced and Pgim is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Strategy Fund 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 Balanced Strategy 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 Balanced Strategy Fund 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 Balanced Strategy i.e., Balanced Strategy and Pgim Securitized go up and down completely randomly.

Pair Corralation between Balanced Strategy and Pgim Securitized

Assuming the 90 days horizon Balanced Strategy Fund is expected to generate 4.6 times more return on investment than Pgim Securitized. However, Balanced Strategy is 4.6 times more volatile than Pgim Securitized Credit. It trades about 0.26 of its potential returns per unit of risk. Pgim Securitized Credit is currently generating about 0.25 per unit of risk. If you would invest  1,047  in Balanced Strategy Fund on June 15, 2025 and sell it today you would earn a total of  70.00  from holding Balanced Strategy Fund or generate 6.69% return on investment over 90 days.

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

Balanced Strategy Fund  vs.  Pgim Securitized Credit

Balanced Strategy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Balanced Strategy Fund are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Balanced Strategy may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Pgim Securitized Credit

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pgim Securitized Credit are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pgim Securitized is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Balanced Strategy and Pgim Securitized

The main advantage of trading using opposite Balanced Strategy and Pgim Securitized positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Strategy 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.

The idea behind Balanced Strategy Fund and Pgim Securitized Credit 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.

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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.