Correlation Between Pacer Cash and SPDR SP
Can any of the company-specific risk be diversified away by investing in both Pacer Cash and SPDR SP 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 SPDR SP 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 SPDR SP Dividend, you can compare the effects of market volatilities on Pacer Cash and SPDR SP 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 SPDR SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacer Cash and SPDR SP.
Diversification Opportunities for Pacer Cash and SPDR SP
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pacer and SPDR is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Cash Cows and SPDR SP Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Dividend 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 SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP Dividend has no effect on the direction of Pacer Cash i.e., Pacer Cash and SPDR SP go up and down completely randomly.
Pair Corralation between Pacer Cash and SPDR SP
Given the investment horizon of 90 days Pacer Cash Cows is expected to generate 1.28 times more return on investment than SPDR SP. However, Pacer Cash is 1.28 times more volatile than SPDR SP Dividend. It trades about 0.1 of its potential returns per unit of risk. SPDR SP Dividend is currently generating about 0.08 per unit of risk. If you would invest 4,653 in Pacer Cash Cows on August 28, 2024 and sell it today you would earn a total of 1,482 from holding Pacer Cash Cows or generate 31.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacer Cash Cows vs. SPDR SP Dividend
Performance |
| Timeline |
| Pacer Cash Cows |
| SPDR SP Dividend |
Pacer Cash and SPDR SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacer Cash and SPDR SP
The main advantage of trading using opposite Pacer Cash and SPDR SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacer Cash position performs unexpectedly, SPDR SP 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 SPDR SP will offset losses from the drop in SPDR SP's long position.| Pacer Cash vs. Pacer Small Cap | Pacer Cash vs. Pacer Global Cash | Pacer Cash vs. Amplify CWP Enhanced | Pacer Cash vs. JPMorgan Nasdaq Equity |
| SPDR SP vs. iShares Select Dividend | SPDR SP vs. Vanguard Dividend Appreciation | SPDR SP vs. Vanguard High Dividend | SPDR SP vs. ProShares SP 500 |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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