Correlation Between IShares Expanded and Pacer Global
Can any of the company-specific risk be diversified away by investing in both IShares Expanded and Pacer Global 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 Expanded and Pacer Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Expanded Tech Software and Pacer Global Cash, you can compare the effects of market volatilities on IShares Expanded and Pacer Global 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 Expanded with a short position of Pacer Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Expanded and Pacer Global.
Diversification Opportunities for IShares Expanded and Pacer Global
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and Pacer is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding iShares Expanded Tech Software and Pacer Global Cash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Global Cash and IShares Expanded 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 Expanded Tech Software are associated (or correlated) with Pacer Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Global Cash has no effect on the direction of IShares Expanded i.e., IShares Expanded and Pacer Global go up and down completely randomly.
Pair Corralation between IShares Expanded and Pacer Global
Considering the 90-day investment horizon iShares Expanded Tech Software is expected to generate 2.45 times more return on investment than Pacer Global. However, IShares Expanded is 2.45 times more volatile than Pacer Global Cash. It trades about 0.45 of its potential returns per unit of risk. Pacer Global Cash is currently generating about -0.14 per unit of risk. If you would invest 9,079 in iShares Expanded Tech Software on August 24, 2024 and sell it today you would earn a total of 1,375 from holding iShares Expanded Tech Software or generate 15.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Expanded Tech Software vs. Pacer Global Cash
Performance |
| Timeline |
| iShares Expanded Tech |
| Pacer Global Cash |
IShares Expanded and Pacer Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Expanded and Pacer Global
The main advantage of trading using opposite IShares Expanded and Pacer Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Expanded position performs unexpectedly, Pacer Global 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 Global will offset losses from the drop in Pacer Global's long position.| IShares Expanded vs. First Trust Technology | IShares Expanded vs. Fidelity MSCI Information | IShares Expanded vs. First Trust Nasdaq | IShares Expanded vs. iShares Global Tech |
| Pacer Global vs. Pacer Cash Cows | Pacer Global vs. Pacer Small Cap | Pacer Global vs. Pacer Developed Markets | Pacer Global vs. Pacer Trendpilot Large |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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