Correlation Between IShares Currency and Pacer Trendpilot
Can any of the company-specific risk be diversified away by investing in both IShares Currency and Pacer Trendpilot 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 IShares Currency and Pacer Trendpilot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Currency Hedged and Pacer Trendpilot Mid, you can compare the effects of market volatilities on IShares Currency and Pacer Trendpilot 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 IShares Currency with a short position of Pacer Trendpilot. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Currency and Pacer Trendpilot.
Diversification Opportunities for IShares Currency and Pacer Trendpilot
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between IShares and Pacer is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding iShares Currency Hedged and Pacer Trendpilot Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Trendpilot Mid and IShares Currency 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 iShares Currency Hedged are associated (or correlated) with Pacer Trendpilot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Trendpilot Mid has no effect on the direction of IShares Currency i.e., IShares Currency and Pacer Trendpilot go up and down completely randomly.
Pair Corralation between IShares Currency and Pacer Trendpilot
Given the investment horizon of 90 days iShares Currency Hedged is expected to generate 0.71 times more return on investment than Pacer Trendpilot. However, iShares Currency Hedged is 1.41 times less risky than Pacer Trendpilot. It trades about 0.45 of its potential returns per unit of risk. Pacer Trendpilot Mid is currently generating about -0.01 per unit of risk. If you would invest 3,564 in iShares Currency Hedged on November 30, 2024 and sell it today you would earn a total of 435.00 from holding iShares Currency Hedged or generate 12.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Currency Hedged vs. Pacer Trendpilot Mid
Performance |
| Timeline |
| iShares Currency Hedged |
| Pacer Trendpilot Mid |
IShares Currency and Pacer Trendpilot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Currency and Pacer Trendpilot
The main advantage of trading using opposite IShares Currency and Pacer Trendpilot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Currency position performs unexpectedly, Pacer Trendpilot 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 Trendpilot will offset losses from the drop in Pacer Trendpilot's long position.| IShares Currency vs. iShares Currency Hedged | IShares Currency vs. iShares Currency Hedged | IShares Currency vs. Xtrackers MSCI Europe | IShares Currency vs. iShares Currency Hedged |
| Pacer Trendpilot vs. Pacer Trendpilot Large | Pacer Trendpilot vs. Pacer Trendpilot 100 | Pacer Trendpilot vs. Pacer Trendpilot European | Pacer Trendpilot vs. Pacer Trendpilot International |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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