Correlation Between Pacer Funds and BrandywineGLOBAL
Can any of the company-specific risk be diversified away by investing in both Pacer Funds and BrandywineGLOBAL 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 Funds and BrandywineGLOBAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacer Funds Trust and BrandywineGLOBAL Dynamic, you can compare the effects of market volatilities on Pacer Funds and BrandywineGLOBAL 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 Funds with a short position of BrandywineGLOBAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacer Funds and BrandywineGLOBAL.
Diversification Opportunities for Pacer Funds and BrandywineGLOBAL
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pacer and BrandywineGLOBAL is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Funds Trust and BrandywineGLOBAL Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BrandywineGLOBAL D and Pacer Funds 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 Funds Trust are associated (or correlated) with BrandywineGLOBAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BrandywineGLOBAL D has no effect on the direction of Pacer Funds i.e., Pacer Funds and BrandywineGLOBAL go up and down completely randomly.
Pair Corralation between Pacer Funds and BrandywineGLOBAL
Given the investment horizon of 90 days Pacer Funds is expected to generate 3.51 times less return on investment than BrandywineGLOBAL. But when comparing it to its historical volatility, Pacer Funds Trust is 1.31 times less risky than BrandywineGLOBAL. It trades about 0.12 of its potential returns per unit of risk. BrandywineGLOBAL Dynamic is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,400 in BrandywineGLOBAL Dynamic on September 4, 2024 and sell it today you would earn a total of 97.00 from holding BrandywineGLOBAL Dynamic or generate 6.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacer Funds Trust vs. BrandywineGLOBAL Dynamic
Performance |
| Timeline |
| Pacer Funds Trust |
| BrandywineGLOBAL D |
Pacer Funds and BrandywineGLOBAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacer Funds and BrandywineGLOBAL
The main advantage of trading using opposite Pacer Funds and BrandywineGLOBAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacer Funds position performs unexpectedly, BrandywineGLOBAL 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 BrandywineGLOBAL will offset losses from the drop in BrandywineGLOBAL's long position.| Pacer Funds vs. BrandywineGLOBAL Dynamic | Pacer Funds vs. First Trust Growth | Pacer Funds vs. Invesco NASDAQ Future | Pacer Funds vs. Burney Factor Rotation |
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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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