Correlation Between AEMB and Pacer Trendpilot

Can any of the company-specific risk be diversified away by investing in both AEMB 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 AEMB and Pacer Trendpilot into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AEMB and Pacer Trendpilot Bond, you can compare the effects of market volatilities on AEMB 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 AEMB with a short position of Pacer Trendpilot. Check out your portfolio center. Please also check ongoing floating volatility patterns of AEMB and Pacer Trendpilot.

Diversification Opportunities for AEMB and Pacer Trendpilot

0.0

Correlation Coefficient

AEMB  Pacer Trendpilot

Pay attention - limited upside

The 3 months correlation between AEMB and Pacer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AEMB and Pacer Trendpilot Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Trendpilot Bond and AEMB 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 AEMB 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 Bond has no effect on the direction of AEMB i.e., AEMB and Pacer Trendpilot go up and down completely randomly.

Pair Corralation between AEMB and Pacer Trendpilot

If you would invest  1,972  in Pacer Trendpilot Bond on December 29, 2024 and sell it today you would earn a total of  33.00  from holding Pacer Trendpilot Bond or generate 1.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

AEMB  vs.  Pacer Trendpilot Bond

AEMB

Risk-Adjusted Performance

Very Weak

Over the last 90 days AEMB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, AEMB is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pacer Trendpilot Bond

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pacer Trendpilot Bond are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental drivers, Pacer Trendpilot is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with AEMB and Pacer Trendpilot

The main advantage of trading using opposite AEMB and Pacer Trendpilot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AEMB 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.

The idea behind AEMB and Pacer Trendpilot Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.