Correlation Between Pacer Financial and Real Estate
Can any of the company-specific risk be diversified away by investing in both Pacer Financial and Real Estate 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 Real Estate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacer Financial and The Real Estate, you can compare the effects of market volatilities on Pacer Financial and Real Estate 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 Real Estate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacer Financial and Real Estate.
Diversification Opportunities for Pacer Financial and Real Estate
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pacer and Real is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Financial and The Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Estate 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 Real Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Estate has no effect on the direction of Pacer Financial i.e., Pacer Financial and Real Estate go up and down completely randomly.
Pair Corralation between Pacer Financial and Real Estate
Considering the 90-day investment horizon Pacer Financial is expected to generate 2.5 times more return on investment than Real Estate. However, Pacer Financial is 2.5 times more volatile than The Real Estate. It trades about 0.06 of its potential returns per unit of risk. The Real Estate is currently generating about 0.05 per unit of risk. If you would invest 599.00 in Pacer Financial on August 31, 2024 and sell it today you would earn a total of 141.00 from holding Pacer Financial or generate 23.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.11% |
| Values | Daily Returns |
Pacer Financial vs. The Real Estate
Performance |
| Timeline |
| Pacer Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Real Estate |
Pacer Financial and Real Estate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacer Financial and Real Estate
The main advantage of trading using opposite Pacer Financial and Real Estate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacer Financial position performs unexpectedly, Real Estate 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 Real Estate will offset losses from the drop in Real Estate's long position.| Pacer Financial vs. Gladstone Commercial | Pacer Financial vs. W P Carey | Pacer Financial vs. Peakstone Realty Trust | Pacer Financial vs. CTO Realty Growth |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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