Correlation Between IShares Small and Pacer Cash
Can any of the company-specific risk be diversified away by investing in both IShares Small and Pacer Cash 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 IShares Small and Pacer Cash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Small Cap and Pacer Cash Cows, you can compare the effects of market volatilities on IShares Small and Pacer Cash 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 IShares Small with a short position of Pacer Cash. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Small and Pacer Cash.
Diversification Opportunities for IShares Small and Pacer Cash
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Pacer is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding iShares Small Cap and Pacer Cash Cows in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Cash Cows and IShares Small 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 iShares Small Cap are associated (or correlated) with Pacer Cash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Cash Cows has no effect on the direction of IShares Small i.e., IShares Small and Pacer Cash go up and down completely randomly.
Pair Corralation between IShares Small and Pacer Cash
Given the investment horizon of 90 days iShares Small Cap is expected to generate 1.51 times more return on investment than Pacer Cash. However, IShares Small is 1.51 times more volatile than Pacer Cash Cows. It trades about 0.04 of its potential returns per unit of risk. Pacer Cash Cows is currently generating about 0.06 per unit of risk. If you would invest 2,761 in iShares Small Cap on September 3, 2024 and sell it today you would earn a total of 812.00 from holding iShares Small Cap or generate 29.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Small Cap vs. Pacer Cash Cows
Performance |
| Timeline |
| iShares Small Cap |
| Pacer Cash Cows |
IShares Small and Pacer Cash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Small and Pacer Cash
The main advantage of trading using opposite IShares Small and Pacer Cash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Small position performs unexpectedly, Pacer Cash 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 Cash will offset losses from the drop in Pacer Cash's long position.| IShares Small vs. Horizon Kinetics Inflation | IShares Small vs. Virtus ETF Trust | IShares Small vs. Invesco SP SmallCap | IShares Small vs. iShares MSCI USA |
| Pacer Cash vs. Vanguard Mid Cap Value | Pacer Cash vs. SPDR SP Dividend | Pacer Cash vs. SCOR PK | Pacer Cash vs. HUMANA INC |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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