Correlation Between Intel and Pacer WealthShield

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

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

Diversification Opportunities for Intel and Pacer WealthShield

-0.44

Correlation Coefficient

Intel  Pacer WealthShield

Very good diversification

The 3 months correlation between Intel and Pacer is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Pacer WealthShield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer WealthShield and Intel 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 Intel are associated (or correlated) with Pacer WealthShield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer WealthShield has no effect on the direction of Intel i.e., Intel and Pacer WealthShield go up and down completely randomly.

Pair Corralation between Intel and Pacer WealthShield

Given the investment horizon of 90 days Intel is expected to generate 1.72 times less return on investment than Pacer WealthShield. In addition to that, Intel is 3.82 times more volatile than Pacer WealthShield. It trades about 0.01 of its total potential returns per unit of risk. Pacer WealthShield is currently generating about 0.04 per unit of volatility. If you would invest  2,806  in Pacer WealthShield on September 4, 2024 and sell it today you would earn a total of  358.00  from holding Pacer WealthShield or generate 12.76% return on investment over 90 days.

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

Intel  vs.  Pacer WealthShield

Intel

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intel are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Intel exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pacer WealthShield

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pacer WealthShield has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Pacer WealthShield 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 Intel and Pacer WealthShield

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

The idea behind Intel and Pacer WealthShield 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..