Correlation Between Pacer Cash and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both Pacer Cash and IShares MSCI 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 IShares MSCI 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 iShares MSCI USA, you can compare the effects of market volatilities on Pacer Cash and IShares MSCI 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 IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacer Cash and IShares MSCI.
Diversification Opportunities for Pacer Cash and IShares MSCI
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pacer and IShares is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Cash Cows and iShares MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI USA 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 IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI USA has no effect on the direction of Pacer Cash i.e., Pacer Cash and IShares MSCI go up and down completely randomly.
Pair Corralation between Pacer Cash and IShares MSCI
Given the investment horizon of 90 days Pacer Cash Cows is expected to generate 1.03 times more return on investment than IShares MSCI. However, Pacer Cash is 1.03 times more volatile than iShares MSCI USA. It trades about 0.01 of its potential returns per unit of risk. iShares MSCI USA is currently generating about -0.13 per unit of risk. If you would invest 5,970 in Pacer Cash Cows on September 13, 2024 and sell it today you would earn a total of 9.00 from holding Pacer Cash Cows or generate 0.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacer Cash Cows vs. iShares MSCI USA
Performance |
| Timeline |
| Pacer Cash Cows |
| iShares MSCI USA |
Pacer Cash and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacer Cash and IShares MSCI
The main advantage of trading using opposite Pacer Cash and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacer Cash position performs unexpectedly, IShares MSCI 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 IShares MSCI will offset losses from the drop in IShares MSCI'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 |
| IShares MSCI vs. iShares MSCI USA | IShares MSCI vs. iShares MSCI USA | IShares MSCI vs. iShares MSCI USA | IShares MSCI vs. iShares MSCI USA |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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