Correlation Between Defiance ETFs and Pacer Benchmark

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

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

Diversification Opportunities for Defiance ETFs and Pacer Benchmark

0.0

Correlation Coefficient

Defiance ETFs  Pacer Benchmark

Pay attention - limited upside

The 3 months correlation between Defiance and Pacer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Defiance ETFs and Pacer Benchmark Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Benchmark Data and Defiance ETFs 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 Defiance ETFs are associated (or correlated) with Pacer Benchmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Benchmark Data has no effect on the direction of Defiance ETFs i.e., Defiance ETFs and Pacer Benchmark go up and down completely randomly.

Pair Corralation between Defiance ETFs and Pacer Benchmark

If you would invest (100.00) in Defiance ETFs on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Defiance ETFs or generate -100.0% return on investment over 90 days.

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

Defiance ETFs  vs.  Pacer Benchmark Data

Defiance ETFs

Risk-Adjusted Performance

Very Weak

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

Pacer Benchmark Data

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pacer Benchmark Data has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Pacer Benchmark is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Defiance ETFs and Pacer Benchmark

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

The idea behind Defiance ETFs and Pacer Benchmark Data 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.