Correlation Between Pacer Pacific and Blackrock ETF

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

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

Diversification Opportunities for Pacer Pacific and Blackrock ETF

0.58

Correlation Coefficient

Pacer Pacific  Blackrock ETF

Very weak diversification

The 3 months correlation between Pacer and Blackrock is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Pacific Asset and Blackrock ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock ETF Trust and Pacer Pacific 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 Pacific Asset are associated (or correlated) with Blackrock ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock ETF Trust has no effect on the direction of Pacer Pacific i.e., Pacer Pacific and Blackrock ETF go up and down completely randomly.

Pair Corralation between Pacer Pacific and Blackrock ETF

Given the investment horizon of 90 days Pacer Pacific Asset is expected to generate 0.51 times more return on investment than Blackrock ETF. However, Pacer Pacific Asset is 1.96 times less risky than Blackrock ETF. It trades about 0.14 of its potential returns per unit of risk. Blackrock ETF Trust is currently generating about 0.01 per unit of risk. If you would invest  4,674  in Pacer Pacific Asset on December 29, 2024 and sell it today you would earn a total of  32.00  from holding Pacer Pacific Asset or generate 0.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Pacer Pacific Asset  vs.  Blackrock ETF Trust

Pacer Pacific Asset

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pacer Pacific Asset are ranked lower than 10 (%) 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.

Blackrock ETF Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackrock ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Blackrock ETF is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Pacer Pacific and Blackrock ETF

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

The idea behind Pacer Pacific Asset and Blackrock ETF Trust 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.