Correlation Between Pacer Small and Acquirers
Can any of the company-specific risk be diversified away by investing in both Pacer Small and Acquirers 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 Acquirers 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 The Acquirers, you can compare the effects of market volatilities on Pacer Small and Acquirers 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 Acquirers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacer Small and Acquirers.
Diversification Opportunities for Pacer Small and Acquirers
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pacer and Acquirers is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Small Cap and The Acquirers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acquirers 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 Acquirers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acquirers has no effect on the direction of Pacer Small i.e., Pacer Small and Acquirers go up and down completely randomly.
Pair Corralation between Pacer Small and Acquirers
Given the investment horizon of 90 days Pacer Small is expected to generate 2.98 times less return on investment than Acquirers. In addition to that, Pacer Small is 1.11 times more volatile than The Acquirers. It trades about 0.03 of its total potential returns per unit of risk. The Acquirers is currently generating about 0.08 per unit of volatility. If you would invest 3,791 in The Acquirers on September 1, 2024 and sell it today you would earn a total of 525.00 from holding The Acquirers or generate 13.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Pacer Small Cap vs. The Acquirers
Performance |
| Timeline |
| Pacer Small Cap |
| Acquirers |
Pacer Small and Acquirers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacer Small and Acquirers
The main advantage of trading using opposite Pacer Small and Acquirers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacer Small position performs unexpectedly, Acquirers 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 Acquirers will offset losses from the drop in Acquirers' 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 |
| Acquirers vs. Roundhill Acquirers Deep | Acquirers vs. Alpha Architect Quantitative | Acquirers vs. Vesper Large Cap | Acquirers vs. Cambria Trinity 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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