Correlation Between IShares Expanded and Pacer Trendpilot
Can any of the company-specific risk be diversified away by investing in both IShares Expanded 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 Expanded 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 Expanded Tech Software and Pacer Trendpilot 100, you can compare the effects of market volatilities on IShares Expanded 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 Expanded with a short position of Pacer Trendpilot. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Expanded and Pacer Trendpilot.
Diversification Opportunities for IShares Expanded and Pacer Trendpilot
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Pacer is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding iShares Expanded Tech Software and Pacer Trendpilot 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Trendpilot 100 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 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 100 has no effect on the direction of IShares Expanded i.e., IShares Expanded and Pacer Trendpilot go up and down completely randomly.
Pair Corralation between IShares Expanded and Pacer Trendpilot
Considering the 90-day investment horizon iShares Expanded Tech Software is expected to generate 2.54 times more return on investment than Pacer Trendpilot. However, IShares Expanded is 2.54 times more volatile than Pacer Trendpilot 100. It trades about 0.32 of its potential returns per unit of risk. Pacer Trendpilot 100 is currently generating about 0.07 per unit of risk. If you would invest 9,389 in iShares Expanded Tech Software on August 30, 2024 and sell it today you would earn a total of 1,041 from holding iShares Expanded Tech Software or generate 11.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
iShares Expanded Tech Software vs. Pacer Trendpilot 100
Performance |
| Timeline |
| iShares Expanded Tech |
| Pacer Trendpilot 100 |
IShares Expanded and Pacer Trendpilot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Expanded and Pacer Trendpilot
The main advantage of trading using opposite IShares Expanded and Pacer Trendpilot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Expanded 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 Expanded vs. First Trust Exchange Traded | IShares Expanded vs. Ultimus Managers Trust | IShares Expanded vs. Horizon Kinetics Medical | IShares Expanded vs. Harbor Health Care |
| Pacer Trendpilot vs. Pacer Trendpilot Large | Pacer Trendpilot vs. Pacer Trendpilot Mid | Pacer Trendpilot vs. Pacer Trendpilot European | Pacer Trendpilot vs. Nuveen ESG Large Cap |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |