Correlation Between Pacer Funds and Pacer BlueStar

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

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

Diversification Opportunities for Pacer Funds and Pacer BlueStar

-0.04

Correlation Coefficient

Pacer Funds  Pacer BlueStar

Good diversification

The 3 months correlation between Pacer and Pacer is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Funds Trust and Pacer BlueStar Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer BlueStar Digital and Pacer Funds 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 Pacer Funds Trust are associated (or correlated) with Pacer BlueStar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer BlueStar Digital has no effect on the direction of Pacer Funds i.e., Pacer Funds and Pacer BlueStar go up and down completely randomly.

Pair Corralation between Pacer Funds and Pacer BlueStar

Given the investment horizon of 90 days Pacer Funds Trust is expected to under-perform the Pacer BlueStar. But the etf apears to be less risky and, when comparing its historical volatility, Pacer Funds Trust is 1.51 times less risky than Pacer BlueStar. The etf trades about -0.03 of its potential returns per unit of risk. The Pacer BlueStar Digital is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,803  in Pacer BlueStar Digital on October 22, 2024 and sell it today you would earn a total of  751.00  from holding Pacer BlueStar Digital or generate 41.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	42.22%
Values	Daily Returns

Pacer Funds Trust  vs.  Pacer BlueStar Digital

Pacer Funds Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pacer Funds Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Pacer Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pacer BlueStar Digital

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pacer BlueStar Digital are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady fundamental indicators, Pacer BlueStar may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Pacer Funds and Pacer BlueStar

The main advantage of trading using opposite Pacer Funds and Pacer BlueStar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacer Funds position performs unexpectedly, Pacer BlueStar 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 BlueStar will offset losses from the drop in Pacer BlueStar's long position.

The idea behind Pacer Funds Trust and Pacer BlueStar Digital 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.