Correlation Between VictoryShares THB and Pacer Funds

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

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

Diversification Opportunities for VictoryShares THB and Pacer Funds

-0.02

Correlation Coefficient

VictoryShares THB  Pacer Funds

Good diversification

The 3 months correlation between VictoryShares and Pacer is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding VictoryShares THB Mid and Pacer Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Funds Trust and VictoryShares THB 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 VictoryShares THB Mid are associated (or correlated) with Pacer Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Funds Trust has no effect on the direction of VictoryShares THB i.e., VictoryShares THB and Pacer Funds go up and down completely randomly.

Pair Corralation between VictoryShares THB and Pacer Funds

Given the investment horizon of 90 days VictoryShares THB Mid is expected to generate 0.61 times more return on investment than Pacer Funds. However, VictoryShares THB Mid is 1.65 times less risky than Pacer Funds. It trades about 0.17 of its potential returns per unit of risk. Pacer Funds Trust is currently generating about 0.09 per unit of risk. If you would invest  2,822  in VictoryShares THB Mid on October 21, 2024 and sell it today you would earn a total of  75.00  from holding VictoryShares THB Mid or generate 2.66% return on investment over 90 days.

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

VictoryShares THB Mid  vs.  Pacer Funds Trust

VictoryShares THB Mid

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pacer Funds Trust

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pacer Funds Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, Pacer Funds may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with VictoryShares THB and Pacer Funds

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

The idea behind VictoryShares THB Mid and Pacer Funds 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.