Correlation Between SPDR SP and Pacer
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Pacer 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 SP and Pacer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP 500 and Pacer, you can compare the effects of market volatilities on SPDR SP and Pacer 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 SP with a short position of Pacer. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Pacer.
Diversification Opportunities for SPDR SP and Pacer
Pay attention - limited upside
The 3 months correlation between SPDR and Pacer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 500 and Pacer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer and SPDR SP 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 SP 500 are associated (or correlated) with Pacer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer has no effect on the direction of SPDR SP i.e., SPDR SP and Pacer go up and down completely randomly.
Pair Corralation between SPDR SP and Pacer
If you would invest (100.00) in Pacer on November 28, 2024 and sell it today you would earn a total of 100.00 from holding Pacer or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
SPDR SP 500 vs. Pacer
Performance |
| Timeline |
| SPDR SP 500 |
| Pacer |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
SPDR SP and Pacer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Pacer
The main advantage of trading using opposite SPDR SP and Pacer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Pacer 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 will offset losses from the drop in Pacer's long position.| SPDR SP vs. Vanguard SP 500 | SPDR SP vs. FT Vest Equity | SPDR SP vs. Zillow Group Class | SPDR SP vs. Northern Lights |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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