Correlation Between NYSE Composite and Pacer Benchmark
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Pacer Benchmark 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 NYSE Composite and Pacer Benchmark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Pacer Benchmark Industrial, you can compare the effects of market volatilities on NYSE Composite and Pacer Benchmark 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 NYSE Composite with a short position of Pacer Benchmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Pacer Benchmark.
Diversification Opportunities for NYSE Composite and Pacer Benchmark
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Pacer is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Pacer Benchmark Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Benchmark Indu and NYSE Composite 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 NYSE Composite are associated (or correlated) with Pacer Benchmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Benchmark Indu has no effect on the direction of NYSE Composite i.e., NYSE Composite and Pacer Benchmark go up and down completely randomly.
Pair Corralation between NYSE Composite and Pacer Benchmark
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.64 times more return on investment than Pacer Benchmark. However, NYSE Composite is 1.55 times less risky than Pacer Benchmark. It trades about 0.24 of its potential returns per unit of risk. Pacer Benchmark Industrial is currently generating about -0.13 per unit of risk. If you would invest 1,945,627 in NYSE Composite on August 26, 2024 and sell it today you would earn a total of 66,718 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Pacer Benchmark Industrial
Performance |
| Timeline |
NYSE Composite and Pacer Benchmark Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Pacer Benchmark Industrial
Pair trading matchups for Pacer Benchmark
Pair Trading with NYSE Composite and Pacer Benchmark
The main advantage of trading using opposite NYSE Composite and Pacer Benchmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Pacer Benchmark 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 Benchmark will offset losses from the drop in Pacer Benchmark's long position.| NYSE Composite vs. Grocery Outlet Holding | NYSE Composite vs. Tencent Music Entertainment | NYSE Composite vs. SunLink Health Systems | NYSE Composite vs. Getty Realty |
| Pacer Benchmark vs. Pacer Benchmark Data | Pacer Benchmark vs. US Diversified Real | Pacer Benchmark vs. Nuveen Short Term REIT |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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