Correlation Between Pacer Benchmark and Invesco

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

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

Diversification Opportunities for Pacer Benchmark and Invesco

0.0

Correlation Coefficient

Pacer Benchmark  Invesco

Pay attention - limited upside

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

Pair Corralation between Pacer Benchmark and Invesco

If you would invest  3,553  in Pacer Benchmark Industrial on December 25, 2024 and sell it today you would earn a total of  66.00  from holding Pacer Benchmark Industrial or generate 1.86% return on investment over 90 days.

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

Pacer Benchmark Industrial  vs.  Invesco

Pacer Benchmark Indu

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pacer Benchmark Industrial are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Pacer Benchmark is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Invesco

Risk-Adjusted Performance

Very Weak

Over the last 90 days Invesco has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Invesco is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Pacer Benchmark and Invesco

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

The idea behind Pacer Benchmark Industrial and Invesco 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.

Check out your portfolio center.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.