Correlation Between IShares Core and Pacer Benchmark
Can any of the company-specific risk be diversified away by investing in both IShares Core and Pacer Benchmark 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 Core and Pacer Benchmark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core REIT and Pacer Benchmark Data, you can compare the effects of market volatilities on IShares Core and Pacer Benchmark 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 Core with a short position of Pacer Benchmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Pacer Benchmark.
Diversification Opportunities for IShares Core and Pacer Benchmark
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Pacer is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core REIT and Pacer Benchmark Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Benchmark Data and IShares Core 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 Core REIT are associated (or correlated) with Pacer Benchmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Benchmark Data has no effect on the direction of IShares Core i.e., IShares Core and Pacer Benchmark go up and down completely randomly.
Pair Corralation between IShares Core and Pacer Benchmark
Given the investment horizon of 90 days iShares Core REIT is expected to generate 0.99 times more return on investment than Pacer Benchmark. However, iShares Core REIT is 1.01 times less risky than Pacer Benchmark. It trades about 0.07 of its potential returns per unit of risk. Pacer Benchmark Data is currently generating about 0.04 per unit of risk. If you would invest 4,843 in iShares Core REIT on August 30, 2024 and sell it today you would earn a total of 1,433 from holding iShares Core REIT or generate 29.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core REIT vs. Pacer Benchmark Data
Performance |
| Timeline |
| iShares Core REIT |
| Pacer Benchmark Data |
IShares Core and Pacer Benchmark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Pacer Benchmark
The main advantage of trading using opposite IShares Core and Pacer Benchmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Pacer Benchmark 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 Benchmark will offset losses from the drop in Pacer Benchmark's long position.| IShares Core vs. iShares Global REIT | IShares Core vs. Fidelity MSCI Real | IShares Core vs. iShares Residential and | IShares Core vs. Schwab REIT ETF |
| Pacer Benchmark vs. Pacer Benchmark Industrial | Pacer Benchmark vs. First Trust NASDAQ | Pacer Benchmark vs. Global X Internet | Pacer Benchmark vs. ProShares Online Retail |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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