Correlation Between Pacer Benchmark and Defiance ETFs
Can any of the company-specific risk be diversified away by investing in both Pacer Benchmark and Defiance ETFs 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 Benchmark and Defiance ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacer Benchmark Data and Defiance ETFs, you can compare the effects of market volatilities on Pacer Benchmark and Defiance ETFs 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 Benchmark with a short position of Defiance ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacer Benchmark and Defiance ETFs.
Diversification Opportunities for Pacer Benchmark and Defiance ETFs
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pacer and Defiance is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Benchmark Data and Defiance ETFs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defiance ETFs and Pacer Benchmark 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 Benchmark Data are associated (or correlated) with Defiance ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defiance ETFs has no effect on the direction of Pacer Benchmark i.e., Pacer Benchmark and Defiance ETFs go up and down completely randomly.
Pair Corralation between Pacer Benchmark and Defiance ETFs
Given the investment horizon of 90 days Pacer Benchmark is expected to generate 4.25 times less return on investment than Defiance ETFs. But when comparing it to its historical volatility, Pacer Benchmark Data is 1.16 times less risky than Defiance ETFs. It trades about 0.02 of its potential returns per unit of risk. Defiance ETFs is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,719 in Defiance ETFs on November 4, 2024 and sell it today you would earn a total of 458.00 from holding Defiance ETFs or generate 12.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 45.75% |
| Values | Daily Returns |
Pacer Benchmark Data vs. Defiance ETFs
Performance |
| Timeline |
| Pacer Benchmark Data |
| Defiance ETFs |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Pacer Benchmark and Defiance ETFs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacer Benchmark and Defiance ETFs
The main advantage of trading using opposite Pacer Benchmark and Defiance ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacer Benchmark position performs unexpectedly, Defiance ETFs 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 Defiance ETFs will offset losses from the drop in Defiance ETFs' long position.| Pacer Benchmark vs. Pacer Benchmark Industrial | Pacer Benchmark vs. First Trust NASDAQ | Pacer Benchmark vs. Global X Internet | Pacer Benchmark vs. ProShares Online Retail |
| Defiance ETFs vs. Global X Internet | Defiance ETFs vs. First Trust NASDAQ | Defiance ETFs vs. Global X Cloud | Defiance ETFs vs. Pacer Benchmark Data |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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