Correlation Between Nuveen Growth and Pacer Funds
Can any of the company-specific risk be diversified away by investing in both Nuveen Growth and Pacer Funds 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 Nuveen Growth and Pacer Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Growth Opportunities and Pacer Funds Trust, you can compare the effects of market volatilities on Nuveen Growth and Pacer Funds 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 Nuveen Growth with a short position of Pacer Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Growth and Pacer Funds.
Diversification Opportunities for Nuveen Growth and Pacer Funds
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nuveen and Pacer is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Growth Opportunities and Pacer Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Funds Trust and Nuveen Growth 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 Nuveen Growth Opportunities are associated (or correlated) with Pacer Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Funds Trust has no effect on the direction of Nuveen Growth i.e., Nuveen Growth and Pacer Funds go up and down completely randomly.
Pair Corralation between Nuveen Growth and Pacer Funds
Given the investment horizon of 90 days Nuveen Growth Opportunities is expected to under-perform the Pacer Funds. In addition to that, Nuveen Growth is 2.4 times more volatile than Pacer Funds Trust. It trades about -0.09 of its total potential returns per unit of risk. Pacer Funds Trust is currently generating about 0.02 per unit of volatility. If you would invest 2,959 in Pacer Funds Trust on November 28, 2024 and sell it today you would earn a total of 6.00 from holding Pacer Funds Trust or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Growth Opportunities vs. Pacer Funds Trust
Performance |
| Timeline |
| Nuveen Growth Opport |
| Pacer Funds Trust |
Nuveen Growth and Pacer Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Growth and Pacer Funds
The main advantage of trading using opposite Nuveen Growth and Pacer Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Growth position performs unexpectedly, Pacer Funds 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 Funds will offset losses from the drop in Pacer Funds' long position.| Nuveen Growth vs. Invesco ESG NASDAQ | Nuveen Growth vs. Nuveen Winslow Large Cap | Nuveen Growth vs. Sterling Capital Focus | Nuveen Growth vs. First Trust Exchange Traded |
| Pacer Funds vs. Pacer Swan SOS | Pacer Funds vs. Pacer Funds Trust | Pacer Funds vs. Pacer Swan SOS | Pacer Funds vs. First Trust Exchange |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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