Correlation Between SPDR Russell and Pacer Cash
Can any of the company-specific risk be diversified away by investing in both SPDR Russell and Pacer Cash 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 SPDR Russell and Pacer Cash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Russell 1000 and Pacer Cash Cows, you can compare the effects of market volatilities on SPDR Russell and Pacer Cash 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 SPDR Russell with a short position of Pacer Cash. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Russell and Pacer Cash.
Diversification Opportunities for SPDR Russell and Pacer Cash
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Pacer is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Russell 1000 and Pacer Cash Cows in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Cash Cows and SPDR Russell 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 SPDR Russell 1000 are associated (or correlated) with Pacer Cash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Cash Cows has no effect on the direction of SPDR Russell i.e., SPDR Russell and Pacer Cash go up and down completely randomly.
Pair Corralation between SPDR Russell and Pacer Cash
Given the investment horizon of 90 days SPDR Russell is expected to generate 1.24 times less return on investment than Pacer Cash. But when comparing it to its historical volatility, SPDR Russell 1000 is 1.13 times less risky than Pacer Cash. It trades about 0.3 of its potential returns per unit of risk. Pacer Cash Cows is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 5,765 in Pacer Cash Cows on August 28, 2024 and sell it today you would earn a total of 370.00 from holding Pacer Cash Cows or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Russell 1000 vs. Pacer Cash Cows
Performance |
| Timeline |
| SPDR Russell 1000 |
| Pacer Cash Cows |
SPDR Russell and Pacer Cash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Russell and Pacer Cash
The main advantage of trading using opposite SPDR Russell and Pacer Cash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Russell position performs unexpectedly, Pacer Cash 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 Cash will offset losses from the drop in Pacer Cash's long position.| SPDR Russell vs. SPDR Russell 1000 | SPDR Russell vs. SPDR MSCI USA | SPDR Russell vs. SPDR SP 400 | SPDR Russell vs. SPDR MSCI EAFE |
| Pacer Cash vs. Pacer Small Cap | Pacer Cash vs. Pacer Global Cash | Pacer Cash vs. Amplify CWP Enhanced | Pacer Cash vs. JPMorgan Nasdaq Equity |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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