Correlation Between Pacer Cash and Pacer Emerging
Can any of the company-specific risk be diversified away by investing in both Pacer Cash and Pacer Emerging 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 Pacer Cash and Pacer Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacer Cash Cows and Pacer Emerging Markets, you can compare the effects of market volatilities on Pacer Cash and Pacer Emerging 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 Pacer Cash with a short position of Pacer Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacer Cash and Pacer Emerging.
Diversification Opportunities for Pacer Cash and Pacer Emerging
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pacer and Pacer is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Cash Cows and Pacer Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Emerging Markets and Pacer Cash 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 Pacer Cash Cows are associated (or correlated) with Pacer Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Emerging Markets has no effect on the direction of Pacer Cash i.e., Pacer Cash and Pacer Emerging go up and down completely randomly.
Pair Corralation between Pacer Cash and Pacer Emerging
Considering the 90-day investment horizon Pacer Cash Cows is expected to generate 1.0 times more return on investment than Pacer Emerging. However, Pacer Cash is 1.0 times more volatile than Pacer Emerging Markets. It trades about 0.11 of its potential returns per unit of risk. Pacer Emerging Markets is currently generating about 0.04 per unit of risk. If you would invest 3,348 in Pacer Cash Cows on August 31, 2024 and sell it today you would earn a total of 1,612 from holding Pacer Cash Cows or generate 48.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacer Cash Cows vs. Pacer Emerging Markets
Performance |
| Timeline |
| Pacer Cash Cows |
| Pacer Emerging Markets |
Pacer Cash and Pacer Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacer Cash and Pacer Emerging
The main advantage of trading using opposite Pacer Cash and Pacer Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacer Cash position performs unexpectedly, Pacer Emerging 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 Emerging will offset losses from the drop in Pacer Emerging's long position.| Pacer Cash vs. iShares Small Cap | Pacer Cash vs. Invesco ESG NASDAQ | Pacer Cash vs. Invesco ESG NASDAQ | Pacer Cash vs. BlackRock Carbon Transition |
| Pacer Emerging vs. Xtrackers MSCI Emerging | Pacer Emerging vs. FlexShares Morningstar Emerging | Pacer Emerging vs. First Trust 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Stocks Directory Find actively traded stocks across global markets |