Correlation Between IShares Core and Pacer Lunt
Can any of the company-specific risk be diversified away by investing in both IShares Core and Pacer Lunt 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 IShares Core and Pacer Lunt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core Dividend and Pacer Lunt Large, you can compare the effects of market volatilities on IShares Core and Pacer Lunt 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 IShares Core with a short position of Pacer Lunt. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Pacer Lunt.
Diversification Opportunities for IShares Core and Pacer Lunt
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Pacer is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core Dividend and Pacer Lunt Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Lunt Large and IShares Core 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 iShares Core Dividend are associated (or correlated) with Pacer Lunt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Lunt Large has no effect on the direction of IShares Core i.e., IShares Core and Pacer Lunt go up and down completely randomly.
Pair Corralation between IShares Core and Pacer Lunt
Given the investment horizon of 90 days IShares Core is expected to generate 1.17 times less return on investment than Pacer Lunt. In addition to that, IShares Core is 1.27 times more volatile than Pacer Lunt Large. It trades about 0.35 of its total potential returns per unit of risk. Pacer Lunt Large is currently generating about 0.51 per unit of volatility. If you would invest 3,767 in Pacer Lunt Large on September 3, 2024 and sell it today you would earn a total of 221.00 from holding Pacer Lunt Large or generate 5.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core Dividend vs. Pacer Lunt Large
Performance |
| Timeline |
| iShares Core Dividend |
| Pacer Lunt Large |
IShares Core and Pacer Lunt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Pacer Lunt
The main advantage of trading using opposite IShares Core and Pacer Lunt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Pacer Lunt 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 Lunt will offset losses from the drop in Pacer Lunt's long position.| IShares Core vs. iShares Core High | IShares Core vs. Schwab Dividend Equity | IShares Core vs. ProShares SP 500 | IShares Core vs. Invesco SP 500 |
| Pacer Lunt vs. Pacer Lunt Large | Pacer Lunt vs. Pacer Small Cap | Pacer Lunt vs. Pacer Lunt MidCap | Pacer Lunt vs. Pacer Cash Cows |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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