Correlation Between American Express and Pacer Funds
Can any of the company-specific risk be diversified away by investing in both American Express and Pacer Funds 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 American Express and Pacer Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Express and Pacer Funds Trust, you can compare the effects of market volatilities on American Express and Pacer Funds 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 American Express with a short position of Pacer Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and Pacer Funds.
Diversification Opportunities for American Express and Pacer Funds
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Pacer is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding American Express and Pacer Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Funds Trust and American Express 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 American Express are associated (or correlated) with Pacer Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Funds Trust has no effect on the direction of American Express i.e., American Express and Pacer Funds go up and down completely randomly.
Pair Corralation between American Express and Pacer Funds
Considering the 90-day investment horizon American Express is expected to generate 2.08 times more return on investment than Pacer Funds. However, American Express is 2.08 times more volatile than Pacer Funds Trust. It trades about 0.12 of its potential returns per unit of risk. Pacer Funds Trust is currently generating about 0.13 per unit of risk. If you would invest 17,030 in American Express on September 2, 2024 and sell it today you would earn a total of 13,438 from holding American Express or generate 78.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 18.55% |
| Values | Daily Returns |
American Express vs. Pacer Funds Trust
Performance |
| Timeline |
| American Express |
| Pacer Funds Trust |
American Express and Pacer Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and Pacer Funds
The main advantage of trading using opposite American Express and Pacer Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, Pacer Funds 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 Pacer Funds will offset losses from the drop in Pacer Funds' long position.| American Express vs. 360 Finance | American Express vs. Atlanticus Holdings | American Express vs. Qudian Inc | American Express vs. Enova International |
| Pacer Funds vs. Invesco Actively Managed | Pacer Funds vs. iShares Trust | Pacer Funds vs. Xtrackers MSCI Emerging | Pacer Funds vs. iShares MSCI Emerging |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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