Correlation Between ProShares and Pacer Export
Can any of the company-specific risk be diversified away by investing in both ProShares and Pacer Export 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 ProShares and Pacer Export into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares SP 500 and Pacer Export Leaders, you can compare the effects of market volatilities on ProShares and Pacer Export 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 ProShares with a short position of Pacer Export. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares and Pacer Export.
Diversification Opportunities for ProShares and Pacer Export
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and Pacer is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding ProShares SP 500 and Pacer Export Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Export Leaders and ProShares 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 ProShares SP 500 are associated (or correlated) with Pacer Export. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Export Leaders has no effect on the direction of ProShares i.e., ProShares and Pacer Export go up and down completely randomly.
Pair Corralation between ProShares and Pacer Export
Given the investment horizon of 90 days ProShares SP 500 is expected to generate 0.74 times more return on investment than Pacer Export. However, ProShares SP 500 is 1.35 times less risky than Pacer Export. It trades about 0.19 of its potential returns per unit of risk. Pacer Export Leaders is currently generating about 0.07 per unit of risk. If you would invest 6,256 in ProShares SP 500 on August 29, 2024 and sell it today you would earn a total of 217.00 from holding ProShares SP 500 or generate 3.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares SP 500 vs. Pacer Export Leaders
Performance |
| Timeline |
| ProShares SP 500 |
| Pacer Export Leaders |
ProShares and Pacer Export Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares and Pacer Export
The main advantage of trading using opposite ProShares and Pacer Export positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares position performs unexpectedly, Pacer Export 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 Export will offset losses from the drop in Pacer Export's long position.| ProShares vs. Morningstar Unconstrained Allocation | ProShares vs. High Yield Municipal Fund | ProShares vs. Via Renewables | ProShares vs. Knife River |
| Pacer Export vs. ProShares SP 500 | Pacer Export vs. ProShares SP 500 | Pacer Export vs. ProShares SP 500 | Pacer Export vs. DBX ETF Trust |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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