Correlation Between SPDR Portfolio and Pacer Trendpilot
Can any of the company-specific risk be diversified away by investing in both SPDR Portfolio and Pacer Trendpilot 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 SPDR Portfolio and Pacer Trendpilot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Portfolio SP and Pacer Trendpilot Large, you can compare the effects of market volatilities on SPDR Portfolio and Pacer Trendpilot 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 SPDR Portfolio with a short position of Pacer Trendpilot. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Portfolio and Pacer Trendpilot.
Diversification Opportunities for SPDR Portfolio and Pacer Trendpilot
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between SPDR and Pacer is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Portfolio SP and Pacer Trendpilot Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Trendpilot Large and SPDR Portfolio 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 SPDR Portfolio SP are associated (or correlated) with Pacer Trendpilot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Trendpilot Large has no effect on the direction of SPDR Portfolio i.e., SPDR Portfolio and Pacer Trendpilot go up and down completely randomly.
Pair Corralation between SPDR Portfolio and Pacer Trendpilot
Given the investment horizon of 90 days SPDR Portfolio SP is expected to generate 0.99 times more return on investment than Pacer Trendpilot. However, SPDR Portfolio SP is 1.01 times less risky than Pacer Trendpilot. It trades about 0.35 of its potential returns per unit of risk. Pacer Trendpilot Large is currently generating about 0.35 per unit of risk. If you would invest 6,716 in SPDR Portfolio SP on September 2, 2024 and sell it today you would earn a total of 373.00 from holding SPDR Portfolio SP or generate 5.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Portfolio SP vs. Pacer Trendpilot Large
Performance |
| Timeline |
| SPDR Portfolio SP |
| Pacer Trendpilot Large |
SPDR Portfolio and Pacer Trendpilot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Portfolio and Pacer Trendpilot
The main advantage of trading using opposite SPDR Portfolio and Pacer Trendpilot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Portfolio position performs unexpectedly, Pacer Trendpilot 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 Pacer Trendpilot will offset losses from the drop in Pacer Trendpilot's long position.| SPDR Portfolio vs. SPDR Portfolio SP | SPDR Portfolio vs. Invesco NASDAQ 100 | SPDR Portfolio vs. SPDR Portfolio SP | SPDR Portfolio vs. SPDR Portfolio SP |
| Pacer Trendpilot vs. Pacer Trendpilot 100 | Pacer Trendpilot vs. Pacer Trendpilot Mid | Pacer Trendpilot vs. Pacer Trendpilot European | Pacer Trendpilot vs. Pacer Global Cash |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |