Correlation Between Pacer BlueStar and Pacer Funds
Can any of the company-specific risk be diversified away by investing in both Pacer BlueStar 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 Pacer BlueStar and Pacer Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacer BlueStar Engineering and Pacer Funds Trust, you can compare the effects of market volatilities on Pacer BlueStar 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 Pacer BlueStar with a short position of Pacer Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacer BlueStar and Pacer Funds.
Diversification Opportunities for Pacer BlueStar and Pacer Funds
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pacer and Pacer is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Pacer BlueStar Engineering 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 Pacer BlueStar 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 BlueStar Engineering 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 Pacer BlueStar i.e., Pacer BlueStar and Pacer Funds go up and down completely randomly.
Pair Corralation between Pacer BlueStar and Pacer Funds
Given the investment horizon of 90 days Pacer BlueStar is expected to generate 1.37 times less return on investment than Pacer Funds. In addition to that, Pacer BlueStar is 1.05 times more volatile than Pacer Funds Trust. It trades about 0.22 of its total potential returns per unit of risk. Pacer Funds Trust is currently generating about 0.32 per unit of volatility. If you would invest 4,718 in Pacer Funds Trust on September 4, 2024 and sell it today you would earn a total of 426.00 from holding Pacer Funds Trust or generate 9.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacer BlueStar Engineering vs. Pacer Funds Trust
Performance |
| Timeline |
| Pacer BlueStar Engin |
| Pacer Funds Trust |
Pacer BlueStar and Pacer Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacer BlueStar and Pacer Funds
The main advantage of trading using opposite Pacer BlueStar and Pacer Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacer BlueStar 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.| Pacer BlueStar vs. Pacer Emerging Markets | Pacer BlueStar vs. Pacer Funds Trust | Pacer BlueStar vs. Pacer Funds Trust | Pacer BlueStar vs. Invesco BulletShares 2031 |
| Pacer Funds vs. Vanguard Information Technology | Pacer Funds vs. Technology Select Sector | Pacer Funds vs. iShares Technology ETF | Pacer Funds vs. VanEck Semiconductor ETF |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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