Correlation Between Pacer Export and PIMCO RAFI
Can any of the company-specific risk be diversified away by investing in both Pacer Export and PIMCO RAFI 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 Pacer Export and PIMCO RAFI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacer Export Leaders and PIMCO RAFI Dynamic, you can compare the effects of market volatilities on Pacer Export and PIMCO RAFI 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 Pacer Export with a short position of PIMCO RAFI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacer Export and PIMCO RAFI.
Diversification Opportunities for Pacer Export and PIMCO RAFI
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pacer and PIMCO is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Export Leaders and PIMCO RAFI Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO RAFI Dynamic and Pacer Export 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 Pacer Export Leaders are associated (or correlated) with PIMCO RAFI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO RAFI Dynamic has no effect on the direction of Pacer Export i.e., Pacer Export and PIMCO RAFI go up and down completely randomly.
Pair Corralation between Pacer Export and PIMCO RAFI
Given the investment horizon of 90 days Pacer Export is expected to generate 2.45 times less return on investment than PIMCO RAFI. In addition to that, Pacer Export is 1.49 times more volatile than PIMCO RAFI Dynamic. It trades about 0.07 of its total potential returns per unit of risk. PIMCO RAFI Dynamic is currently generating about 0.26 per unit of volatility. If you would invest 5,021 in PIMCO RAFI Dynamic on August 31, 2024 and sell it today you would earn a total of 234.00 from holding PIMCO RAFI Dynamic or generate 4.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Pacer Export Leaders vs. PIMCO RAFI Dynamic
Performance |
| Timeline |
| Pacer Export Leaders |
| PIMCO RAFI Dynamic |
Pacer Export and PIMCO RAFI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacer Export and PIMCO RAFI
The main advantage of trading using opposite Pacer Export and PIMCO RAFI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacer Export position performs unexpectedly, PIMCO RAFI 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 PIMCO RAFI will offset losses from the drop in PIMCO RAFI's long position.| Pacer Export vs. Vanguard Mid Cap Growth | Pacer Export vs. ARK Innovation ETF | Pacer Export vs. SPDR Kensho New | Pacer Export vs. SPDR SP 400 |
| PIMCO RAFI vs. PIMCO RAFI Dynamic | PIMCO RAFI vs. PIMCO RAFI Dynamic | PIMCO RAFI vs. JPMorgan Diversified Return | PIMCO RAFI vs. JPMorgan Diversified Return |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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