Correlation Between IShares International and Pacer Cash
Can any of the company-specific risk be diversified away by investing in both IShares International and Pacer Cash 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 International and Pacer Cash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares International Dividend and Pacer Cash Cows, you can compare the effects of market volatilities on IShares International and Pacer Cash 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 International with a short position of Pacer Cash. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares International and Pacer Cash.
Diversification Opportunities for IShares International and Pacer Cash
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between IShares and Pacer is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding iShares International Dividend and Pacer Cash Cows in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Cash Cows and IShares International 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 International Dividend are associated (or correlated) with Pacer Cash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Cash Cows has no effect on the direction of IShares International i.e., IShares International and Pacer Cash go up and down completely randomly.
Pair Corralation between IShares International and Pacer Cash
Given the investment horizon of 90 days iShares International Dividend is expected to under-perform the Pacer Cash. But the etf apears to be less risky and, when comparing its historical volatility, iShares International Dividend is 1.01 times less risky than Pacer Cash. The etf trades about -0.12 of its potential returns per unit of risk. The Pacer Cash Cows is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 5,715 in Pacer Cash Cows on August 24, 2024 and sell it today you would earn a total of 281.00 from holding Pacer Cash Cows or generate 4.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares International Dividend vs. Pacer Cash Cows
Performance |
| Timeline |
| iShares International |
| Pacer Cash Cows |
IShares International and Pacer Cash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares International and Pacer Cash
The main advantage of trading using opposite IShares International and Pacer Cash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares International position performs unexpectedly, Pacer Cash 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 Cash will offset losses from the drop in Pacer Cash's long position.| IShares International vs. Dimensional Core Equity | IShares International vs. Dimensional Emerging Core | IShares International vs. Dimensional Targeted Value | IShares International vs. Dimensional Small Cap |
| Pacer Cash vs. Pacer Small Cap | Pacer Cash vs. Pacer Global Cash | Pacer Cash vs. Amplify CWP Enhanced | Pacer Cash vs. JPMorgan Nasdaq Equity |
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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