Correlation Between Vanguard Momentum and Pacer Export
Can any of the company-specific risk be diversified away by investing in both Vanguard Momentum and Pacer Export 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 Vanguard Momentum and Pacer Export into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Momentum Factor and Pacer Export Leaders, you can compare the effects of market volatilities on Vanguard Momentum and Pacer Export 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 Vanguard Momentum with a short position of Pacer Export. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Momentum and Pacer Export.
Diversification Opportunities for Vanguard Momentum and Pacer Export
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and Pacer is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Momentum Factor and Pacer Export Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Export Leaders and Vanguard Momentum 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 Vanguard Momentum Factor are associated (or correlated) with Pacer Export. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Export Leaders has no effect on the direction of Vanguard Momentum i.e., Vanguard Momentum and Pacer Export go up and down completely randomly.
Pair Corralation between Vanguard Momentum and Pacer Export
Given the investment horizon of 90 days Vanguard Momentum Factor is expected to under-perform the Pacer Export. In addition to that, Vanguard Momentum is 1.48 times more volatile than Pacer Export Leaders. It trades about -0.22 of its total potential returns per unit of risk. Pacer Export Leaders is currently generating about -0.13 per unit of volatility. If you would invest 4,972 in Pacer Export Leaders on December 4, 2024 and sell it today you would lose (123.00) from holding Pacer Export Leaders or give up 2.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Momentum Factor vs. Pacer Export Leaders
Performance |
| Timeline |
| Vanguard Momentum Factor |
| Pacer Export Leaders |
Vanguard Momentum and Pacer Export Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Momentum and Pacer Export
The main advantage of trading using opposite Vanguard Momentum and Pacer Export positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Momentum position performs unexpectedly, Pacer Export 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 Export will offset losses from the drop in Pacer Export's long position.| Vanguard Momentum vs. Vanguard Quality Factor | Vanguard Momentum vs. Vanguard Multifactor | Vanguard Momentum vs. Vanguard Value Factor | Vanguard Momentum vs. Vanguard Minimum Volatility |
| Pacer Export vs. ProShares SP 500 | Pacer Export vs. ProShares SP 500 | Pacer Export vs. ProShares SP 500 | Pacer Export vs. DBX ETF Trust |
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 Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |