Correlation Between Pacer Financial and Armada Hflr
Can any of the company-specific risk be diversified away by investing in both Pacer Financial and Armada Hflr 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 Financial and Armada Hflr into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacer Financial and Armada Hflr Pr, you can compare the effects of market volatilities on Pacer Financial and Armada Hflr 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 Financial with a short position of Armada Hflr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacer Financial and Armada Hflr.
Diversification Opportunities for Pacer Financial and Armada Hflr
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pacer and Armada is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Financial and Armada Hflr Pr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Hflr Pr and Pacer Financial 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 Financial are associated (or correlated) with Armada Hflr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armada Hflr Pr has no effect on the direction of Pacer Financial i.e., Pacer Financial and Armada Hflr go up and down completely randomly.
Pair Corralation between Pacer Financial and Armada Hflr
Considering the 90-day investment horizon Pacer Financial is expected to generate 1.8 times more return on investment than Armada Hflr. However, Pacer Financial is 1.8 times more volatile than Armada Hflr Pr. It trades about 0.06 of its potential returns per unit of risk. Armada Hflr Pr is currently generating about 0.02 per unit of risk. If you would invest 603.00 in Pacer Financial on August 27, 2024 and sell it today you would earn a total of 137.00 from holding Pacer Financial or generate 22.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.85% |
| Values | Daily Returns |
Pacer Financial vs. Armada Hflr Pr
Performance |
| Timeline |
| Pacer Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Armada Hflr Pr |
Pacer Financial and Armada Hflr Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacer Financial and Armada Hflr
The main advantage of trading using opposite Pacer Financial and Armada Hflr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacer Financial position performs unexpectedly, Armada Hflr 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 Armada Hflr will offset losses from the drop in Armada Hflr's long position.| Pacer Financial vs. Vanguard Real Estate | Pacer Financial vs. Howard Hughes | Pacer Financial vs. Site Centers Corp |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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