Correlation Between DSJA and Pacer Swan
Can any of the company-specific risk be diversified away by investing in both DSJA and Pacer Swan 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 DSJA and Pacer Swan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DSJA and Pacer Swan SOS, you can compare the effects of market volatilities on DSJA and Pacer Swan 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 DSJA with a short position of Pacer Swan. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSJA and Pacer Swan.
Diversification Opportunities for DSJA and Pacer Swan
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between DSJA and Pacer is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding DSJA and Pacer Swan SOS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Swan SOS and DSJA 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 DSJA are associated (or correlated) with Pacer Swan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Swan SOS has no effect on the direction of DSJA i.e., DSJA and Pacer Swan go up and down completely randomly.
Pair Corralation between DSJA and Pacer Swan
Given the investment horizon of 90 days DSJA is expected to generate 1.83 times more return on investment than Pacer Swan. However, DSJA is 1.83 times more volatile than Pacer Swan SOS. It trades about 0.14 of its potential returns per unit of risk. Pacer Swan SOS is currently generating about 0.12 per unit of risk. If you would invest 2,468 in DSJA on August 30, 2024 and sell it today you would earn a total of 397.00 from holding DSJA or generate 16.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 31.31% |
| Values | Daily Returns |
DSJA vs. Pacer Swan SOS
Performance |
| Timeline |
| DSJA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Pacer Swan SOS |
DSJA and Pacer Swan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DSJA and Pacer Swan
The main advantage of trading using opposite DSJA and Pacer Swan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSJA position performs unexpectedly, Pacer Swan 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 Swan will offset losses from the drop in Pacer Swan's long position.| DSJA vs. ProShares VIX Mid Term | DSJA vs. ProShares VIX Short Term | DSJA vs. iPath Series B | DSJA vs. ProShares Short Russell2000 |
| Pacer Swan vs. Pacer Swan SOS | Pacer Swan vs. Pacer Swan SOS | Pacer Swan vs. Pacer Funds Trust | Pacer Swan vs. Pacer Swan SOS |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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