Correlation Between Pacer Swan and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Pacer Swan and Dow Jones 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 Swan and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacer Swan SOS and Dow Jones Industrial, you can compare the effects of market volatilities on Pacer Swan and Dow Jones 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 Swan with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacer Swan and Dow Jones.
Diversification Opportunities for Pacer Swan and Dow Jones
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pacer and Dow is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Swan SOS and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Pacer Swan 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 Swan SOS are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Pacer Swan i.e., Pacer Swan and Dow Jones go up and down completely randomly.
Pair Corralation between Pacer Swan and Dow Jones
Given the investment horizon of 90 days Pacer Swan SOS is expected to generate 0.51 times more return on investment than Dow Jones. However, Pacer Swan SOS is 1.97 times less risky than Dow Jones. It trades about 0.01 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.19 per unit of risk. If you would invest 3,020 in Pacer Swan SOS on November 28, 2024 and sell it today you would earn a total of 2.00 from holding Pacer Swan SOS or generate 0.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacer Swan SOS vs. Dow Jones Industrial
Performance |
| Timeline |
Pacer Swan and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Pacer Swan SOS
Pair trading matchups for Pacer Swan
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Pacer Swan and Dow Jones
The main advantage of trading using opposite Pacer Swan and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacer Swan position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Pacer Swan vs. Pacer Swan SOS | Pacer Swan vs. Pacer Funds Trust | Pacer Swan vs. Pacer Swan SOS | Pacer Swan vs. Pacer Funds Trust |
| Dow Jones vs. Gladstone Investment | Dow Jones vs. BW Offshore Limited | Dow Jones vs. Fidus Investment Corp | Dow Jones vs. Aperture Health |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |