Correlation Between ProShares Trust and Pacer Funds
Can any of the company-specific risk be diversified away by investing in both ProShares Trust 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 ProShares Trust and Pacer Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Trust and Pacer Funds Trust, you can compare the effects of market volatilities on ProShares Trust 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 ProShares Trust with a short position of Pacer Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and Pacer Funds.
Diversification Opportunities for ProShares Trust and Pacer Funds
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and Pacer is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust 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 ProShares Trust 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 ProShares Trust 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 ProShares Trust i.e., ProShares Trust and Pacer Funds go up and down completely randomly.
Pair Corralation between ProShares Trust and Pacer Funds
Given the investment horizon of 90 days ProShares Trust is expected to under-perform the Pacer Funds. In addition to that, ProShares Trust is 4.84 times more volatile than Pacer Funds Trust. It trades about -0.11 of its total potential returns per unit of risk. Pacer Funds Trust is currently generating about 0.13 per unit of volatility. If you would invest 2,000 in Pacer Funds Trust on September 2, 2024 and sell it today you would earn a total of 123.00 from holding Pacer Funds Trust or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 18.55% |
| Values | Daily Returns |
ProShares Trust vs. Pacer Funds Trust
Performance |
| Timeline |
| ProShares Trust |
| Pacer Funds Trust |
ProShares Trust and Pacer Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and Pacer Funds
The main advantage of trading using opposite ProShares Trust and Pacer Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust 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.| ProShares Trust vs. AXS TSLA Bear | ProShares Trust vs. Tuttle Capital Short | ProShares Trust vs. ProShares Bitcoin Strategy | ProShares Trust vs. ProShares UltraShort Bloomberg |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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