Correlation Between Pacer Funds and Nuveen Growth
Can any of the company-specific risk be diversified away by investing in both Pacer Funds and Nuveen Growth 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 Funds and Nuveen Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacer Funds Trust and Nuveen Growth Opportunities, you can compare the effects of market volatilities on Pacer Funds and Nuveen Growth 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 Funds with a short position of Nuveen Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacer Funds and Nuveen Growth.
Diversification Opportunities for Pacer Funds and Nuveen Growth
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pacer and Nuveen is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Funds Trust and Nuveen Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Growth Opport and Pacer Funds 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 Funds Trust are associated (or correlated) with Nuveen Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Growth Opport has no effect on the direction of Pacer Funds i.e., Pacer Funds and Nuveen Growth go up and down completely randomly.
Pair Corralation between Pacer Funds and Nuveen Growth
Given the investment horizon of 90 days Pacer Funds Trust is expected to generate 0.42 times more return on investment than Nuveen Growth. However, Pacer Funds Trust is 2.4 times less risky than Nuveen Growth. It trades about 0.02 of its potential returns per unit of risk. Nuveen Growth Opportunities is currently generating about -0.09 per unit of risk. 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 |
Pacer Funds Trust vs. Nuveen Growth Opportunities
Performance |
| Timeline |
| Pacer Funds Trust |
| Nuveen Growth Opport |
Pacer Funds and Nuveen Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacer Funds and Nuveen Growth
The main advantage of trading using opposite Pacer Funds and Nuveen Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacer Funds position performs unexpectedly, Nuveen Growth 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 Nuveen Growth will offset losses from the drop in Nuveen Growth's long position.| Pacer Funds vs. Pacer Swan SOS | Pacer Funds vs. Pacer Funds Trust | Pacer Funds vs. Pacer Swan SOS | Pacer Funds vs. First Trust Exchange |
| 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 |
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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