Correlation Between Pacer Emerging and Pacer Pacific

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

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

Diversification Opportunities for Pacer Emerging and Pacer Pacific

-0.77

Correlation Coefficient

Pacer Emerging  Pacer Pacific

Pay attention - limited upside

The 3 months correlation between Pacer and Pacer is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Emerging Markets and Pacer Pacific Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Pacific Asset and Pacer Emerging 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 Emerging Markets are associated (or correlated) with Pacer Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Pacific Asset has no effect on the direction of Pacer Emerging i.e., Pacer Emerging and Pacer Pacific go up and down completely randomly.

Pair Corralation between Pacer Emerging and Pacer Pacific

Given the investment horizon of 90 days Pacer Emerging Markets is expected to under-perform the Pacer Pacific. In addition to that, Pacer Emerging is 18.54 times more volatile than Pacer Pacific Asset. It trades about -0.14 of its total potential returns per unit of risk. Pacer Pacific Asset is currently generating about 0.6 per unit of volatility. If you would invest  4,694  in Pacer Pacific Asset on October 6, 2024 and sell it today you would earn a total of  68.00  from holding Pacer Pacific Asset or generate 1.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Pacer Emerging Markets  vs.  Pacer Pacific Asset

Pacer Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pacer Emerging Markets has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Etf's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the fund sophisticated investors.

Pacer Pacific Asset

Risk-Adjusted Performance

49 of 100

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Pacer Pacific Asset are ranked lower than 49 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Pacer Pacific is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Pacer Emerging and Pacer Pacific

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

The idea behind Pacer Emerging Markets and Pacer Pacific Asset 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.