Correlation Between SPDR SP and Pacer Trendpilot
Can any of the company-specific risk be diversified away by investing in both SPDR SP 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 SP 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 SP 500 and Pacer Trendpilot Mid, you can compare the effects of market volatilities on SPDR SP 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 SP with a short position of Pacer Trendpilot. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Pacer Trendpilot.
Diversification Opportunities for SPDR SP and Pacer Trendpilot
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SPDR and Pacer is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 500 and Pacer Trendpilot Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Trendpilot Mid 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 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 Mid has no effect on the direction of SPDR SP i.e., SPDR SP and Pacer Trendpilot go up and down completely randomly.
Pair Corralation between SPDR SP and Pacer Trendpilot
Considering the 90-day investment horizon SPDR SP 500 is expected to generate 0.76 times more return on investment than Pacer Trendpilot. However, SPDR SP 500 is 1.31 times less risky than Pacer Trendpilot. It trades about -0.06 of its potential returns per unit of risk. Pacer Trendpilot Mid is currently generating about -0.18 per unit of risk. If you would invest 59,937 in SPDR SP 500 on November 28, 2024 and sell it today you would lose (513.00) from holding SPDR SP 500 or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
SPDR SP 500 vs. Pacer Trendpilot Mid
Performance |
| Timeline |
| SPDR SP 500 |
| Pacer Trendpilot Mid |
SPDR SP and Pacer Trendpilot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Pacer Trendpilot
The main advantage of trading using opposite SPDR SP and Pacer Trendpilot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP 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 SP vs. Vanguard SP 500 | SPDR SP vs. FT Vest Equity | SPDR SP vs. Zillow Group Class | SPDR SP vs. Northern Lights |
| Pacer Trendpilot vs. Pacer Trendpilot Large | Pacer Trendpilot vs. Pacer Trendpilot 100 | Pacer Trendpilot vs. Pacer Trendpilot European | Pacer Trendpilot vs. Pacer Trendpilot International |
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.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |