Correlation Between BrandywineGLOBAL and Pacer Funds
Can any of the company-specific risk be diversified away by investing in both BrandywineGLOBAL and Pacer Funds 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 BrandywineGLOBAL and Pacer Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BrandywineGLOBAL Dynamic and Pacer Funds Trust, you can compare the effects of market volatilities on BrandywineGLOBAL and Pacer Funds 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 BrandywineGLOBAL with a short position of Pacer Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of BrandywineGLOBAL and Pacer Funds.
Diversification Opportunities for BrandywineGLOBAL and Pacer Funds
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BrandywineGLOBAL and Pacer is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding BrandywineGLOBAL Dynamic and Pacer Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Funds Trust and BrandywineGLOBAL 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 BrandywineGLOBAL Dynamic are associated (or correlated) with Pacer Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Funds Trust has no effect on the direction of BrandywineGLOBAL i.e., BrandywineGLOBAL and Pacer Funds go up and down completely randomly.
Pair Corralation between BrandywineGLOBAL and Pacer Funds
Given the investment horizon of 90 days BrandywineGLOBAL Dynamic is expected to under-perform the Pacer Funds. But the etf apears to be less risky and, when comparing its historical volatility, BrandywineGLOBAL Dynamic is 1.23 times less risky than Pacer Funds. The etf trades about -0.12 of its potential returns per unit of risk. The Pacer Funds Trust is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,960 in Pacer Funds Trust on September 12, 2024 and sell it today you would earn a total of 18.50 from holding Pacer Funds Trust or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BrandywineGLOBAL Dynamic vs. Pacer Funds Trust
Performance |
| Timeline |
| BrandywineGLOBAL D |
| Pacer Funds Trust |
BrandywineGLOBAL and Pacer Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BrandywineGLOBAL and Pacer Funds
The main advantage of trading using opposite BrandywineGLOBAL and Pacer Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BrandywineGLOBAL position performs unexpectedly, Pacer Funds 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 Funds will offset losses from the drop in Pacer Funds' long position.| BrandywineGLOBAL vs. Martin Currie Sustainable | BrandywineGLOBAL vs. Burney Factor Rotation | BrandywineGLOBAL vs. Invesco RAFI Strategic | BrandywineGLOBAL vs. First Trust Growth |
| Pacer Funds vs. Freedom Day Dividend | Pacer Funds vs. Franklin Templeton ETF | Pacer Funds vs. iShares MSCI China | Pacer Funds vs. Tidal Trust II |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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