Correlation Between Xtrackers MSCI and Pacer Nasdaq
Can any of the company-specific risk be diversified away by investing in both Xtrackers MSCI and Pacer Nasdaq 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 Xtrackers MSCI and Pacer Nasdaq into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers MSCI Emerging and Pacer Nasdaq International, you can compare the effects of market volatilities on Xtrackers MSCI and Pacer Nasdaq 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 Xtrackers MSCI with a short position of Pacer Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers MSCI and Pacer Nasdaq.
Diversification Opportunities for Xtrackers MSCI and Pacer Nasdaq
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Xtrackers and Pacer is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers MSCI Emerging and Pacer Nasdaq International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Nasdaq Interna and Xtrackers MSCI 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 Xtrackers MSCI Emerging are associated (or correlated) with Pacer Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Nasdaq Interna has no effect on the direction of Xtrackers MSCI i.e., Xtrackers MSCI and Pacer Nasdaq go up and down completely randomly.
Pair Corralation between Xtrackers MSCI and Pacer Nasdaq
Given the investment horizon of 90 days Xtrackers MSCI Emerging is expected to generate 1.29 times more return on investment than Pacer Nasdaq. However, Xtrackers MSCI is 1.29 times more volatile than Pacer Nasdaq International. It trades about 0.31 of its potential returns per unit of risk. Pacer Nasdaq International is currently generating about 0.32 per unit of risk. If you would invest 2,638 in Xtrackers MSCI Emerging on November 28, 2024 and sell it today you would earn a total of 185.00 from holding Xtrackers MSCI Emerging or generate 7.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers MSCI Emerging vs. Pacer Nasdaq International
Performance |
| Timeline |
| Xtrackers MSCI Emerging |
| Pacer Nasdaq Interna |
Xtrackers MSCI and Pacer Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers MSCI and Pacer Nasdaq
The main advantage of trading using opposite Xtrackers MSCI and Pacer Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers MSCI position performs unexpectedly, Pacer Nasdaq 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 Nasdaq will offset losses from the drop in Pacer Nasdaq's long position.| Xtrackers MSCI vs. JPMorgan Fundamental Data | Xtrackers MSCI vs. Matthews China Discovery | Xtrackers MSCI vs. Vanguard Mid Cap Index | Xtrackers MSCI vs. SPDR SP 400 |
| Pacer Nasdaq vs. Strategy Shares | Pacer Nasdaq vs. Freedom Day Dividend | Pacer Nasdaq vs. Franklin Templeton ETF | Pacer Nasdaq vs. iShares MSCI China |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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