Correlation Between Pacer Small and Harbor ETF
Can any of the company-specific risk be diversified away by investing in both Pacer Small and Harbor ETF 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 Small and Harbor ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacer Small Cap and Harbor ETF Trust, you can compare the effects of market volatilities on Pacer Small and Harbor ETF 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 Small with a short position of Harbor ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacer Small and Harbor ETF.
Diversification Opportunities for Pacer Small and Harbor ETF
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pacer and Harbor is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Small Cap and Harbor ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor ETF Trust and Pacer Small 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 Small Cap are associated (or correlated) with Harbor ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor ETF Trust has no effect on the direction of Pacer Small i.e., Pacer Small and Harbor ETF go up and down completely randomly.
Pair Corralation between Pacer Small and Harbor ETF
Given the investment horizon of 90 days Pacer Small Cap is expected to under-perform the Harbor ETF. In addition to that, Pacer Small is 1.11 times more volatile than Harbor ETF Trust. It trades about -0.07 of its total potential returns per unit of risk. Harbor ETF Trust is currently generating about 0.01 per unit of volatility. If you would invest 3,519 in Harbor ETF Trust on September 13, 2024 and sell it today you would earn a total of 6.00 from holding Harbor ETF Trust or generate 0.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Pacer Small Cap vs. Harbor ETF Trust
Performance |
| Timeline |
| Pacer Small Cap |
| Harbor ETF Trust |
Pacer Small and Harbor ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacer Small and Harbor ETF
The main advantage of trading using opposite Pacer Small and Harbor ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacer Small position performs unexpectedly, Harbor ETF 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 Harbor ETF will offset losses from the drop in Harbor ETF's long position.| Pacer Small vs. Pacer Cash Cows | Pacer Small vs. Pacer Global Cash | Pacer Small vs. Pacer Developed Markets | Pacer Small vs. Invesco SP SmallCap |
| Harbor ETF vs. FT Vest Equity | Harbor ETF vs. Northern Lights | Harbor ETF vs. Dimensional International High | Harbor ETF vs. JPMorgan Fundamental Data |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |