Correlation Between Pacer Pacific and PGIM ETF
Can any of the company-specific risk be diversified away by investing in both Pacer Pacific and PGIM ETF 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 Pacific and PGIM ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacer Pacific Asset and PGIM ETF Trust, you can compare the effects of market volatilities on Pacer Pacific and PGIM ETF 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 Pacific with a short position of PGIM ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacer Pacific and PGIM ETF.
Diversification Opportunities for Pacer Pacific and PGIM ETF
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pacer and PGIM is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Pacific Asset and PGIM ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGIM ETF Trust and Pacer Pacific 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 Pacific Asset are associated (or correlated) with PGIM ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGIM ETF Trust has no effect on the direction of Pacer Pacific i.e., Pacer Pacific and PGIM ETF go up and down completely randomly.
Pair Corralation between Pacer Pacific and PGIM ETF
Given the investment horizon of 90 days Pacer Pacific Asset is expected to generate 0.69 times more return on investment than PGIM ETF. However, Pacer Pacific Asset is 1.46 times less risky than PGIM ETF. It trades about 0.41 of its potential returns per unit of risk. PGIM ETF Trust is currently generating about 0.28 per unit of risk. If you would invest 3,851 in Pacer Pacific Asset on September 4, 2024 and sell it today you would earn a total of 917.00 from holding Pacer Pacific Asset or generate 23.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacer Pacific Asset vs. PGIM ETF Trust
Performance |
| Timeline |
| Pacer Pacific Asset |
| PGIM ETF Trust |
Pacer Pacific and PGIM ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacer Pacific and PGIM ETF
The main advantage of trading using opposite Pacer Pacific and PGIM ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacer Pacific position performs unexpectedly, PGIM ETF 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 PGIM ETF will offset losses from the drop in PGIM ETF's long position.| Pacer Pacific vs. Franklin Liberty Senior | Pacer Pacific vs. Franklin Liberty Short | Pacer Pacific vs. SPDR Bloomberg Investment | Pacer Pacific vs. VanEck Investment Grade |
| PGIM ETF vs. SPDR Blackstone Senior | PGIM ETF vs. Janus Detroit Street | PGIM ETF vs. Pacer Pacific Asset |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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