Correlation Between NYSE Composite and Pacer Swan
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Pacer Swan 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 Swan 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 Swan SOS, you can compare the effects of market volatilities on NYSE Composite and Pacer Swan 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 Swan. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Pacer Swan.
Diversification Opportunities for NYSE Composite and Pacer Swan
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Pacer is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Pacer Swan SOS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Swan SOS 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 Swan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Swan SOS has no effect on the direction of NYSE Composite i.e., NYSE Composite and Pacer Swan go up and down completely randomly.
Pair Corralation between NYSE Composite and Pacer Swan
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.34 times more return on investment than Pacer Swan. However, NYSE Composite is 1.34 times more volatile than Pacer Swan SOS. It trades about 0.4 of its potential returns per unit of risk. Pacer Swan SOS is currently generating about 0.37 per unit of risk. If you would invest 1,924,339 in NYSE Composite on September 3, 2024 and sell it today you would earn a total of 96,983 from holding NYSE Composite or generate 5.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Pacer Swan SOS
Performance |
| Timeline |
NYSE Composite and Pacer Swan Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Pacer Swan SOS
Pair trading matchups for Pacer Swan
Pair Trading with NYSE Composite and Pacer Swan
The main advantage of trading using opposite NYSE Composite and Pacer Swan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Pacer Swan 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 Swan will offset losses from the drop in Pacer Swan's long position.| NYSE Composite vs. Lindblad Expeditions Holdings | NYSE Composite vs. LB Foster | NYSE Composite vs. HUTCHMED DRC | NYSE Composite vs. Bridgford Foods |
| Pacer Swan vs. Innovator ETFs Trust | Pacer Swan vs. First Trust Cboe | Pacer Swan vs. FT Cboe Vest | Pacer Swan vs. Innovator SP 500 |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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