Correlation Between Vanguard FTSE and Pacer Trendpilot
Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE 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 Vanguard FTSE and Pacer Trendpilot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard FTSE Pacific and Pacer Trendpilot 100, you can compare the effects of market volatilities on Vanguard FTSE 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 Vanguard FTSE with a short position of Pacer Trendpilot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and Pacer Trendpilot.
Diversification Opportunities for Vanguard FTSE and Pacer Trendpilot
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vanguard and Pacer is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Pacific and Pacer Trendpilot 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Trendpilot 100 and Vanguard FTSE 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 FTSE Pacific 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 100 has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and Pacer Trendpilot go up and down completely randomly.
Pair Corralation between Vanguard FTSE and Pacer Trendpilot
Considering the 90-day investment horizon Vanguard FTSE is expected to generate 2.14 times less return on investment than Pacer Trendpilot. In addition to that, Vanguard FTSE is 1.6 times more volatile than Pacer Trendpilot 100. It trades about 0.03 of its total potential returns per unit of risk. Pacer Trendpilot 100 is currently generating about 0.1 per unit of volatility. If you would invest 6,109 in Pacer Trendpilot 100 on September 12, 2024 and sell it today you would earn a total of 1,503 from holding Pacer Trendpilot 100 or generate 24.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard FTSE Pacific vs. Pacer Trendpilot 100
Performance |
| Timeline |
| Vanguard FTSE Pacific |
| Pacer Trendpilot 100 |
Vanguard FTSE and Pacer Trendpilot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard FTSE and Pacer Trendpilot
The main advantage of trading using opposite Vanguard FTSE and Pacer Trendpilot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE 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.| Vanguard FTSE vs. Vanguard FTSE Europe | Vanguard FTSE vs. Vanguard Large Cap Index | Vanguard FTSE vs. Vanguard Materials Index | Vanguard FTSE vs. Vanguard FTSE All World |
| Pacer Trendpilot vs. iShares Factors Growth | Pacer Trendpilot vs. Absolute Core Strategy | Pacer Trendpilot vs. iShares ESG Advanced | Pacer Trendpilot vs. PIMCO RAFI Dynamic |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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