Correlation Between T Rex and Pacer Benchmark
Can any of the company-specific risk be diversified away by investing in both T Rex 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 T Rex and Pacer Benchmark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between T Rex 2X Long and Pacer Benchmark Industrial, you can compare the effects of market volatilities on T Rex 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 T Rex with a short position of Pacer Benchmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of T Rex and Pacer Benchmark.
Diversification Opportunities for T Rex and Pacer Benchmark
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NVDX and Pacer is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding T Rex 2X Long and Pacer Benchmark Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Benchmark Indu and T Rex 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 T Rex 2X Long 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 Indu has no effect on the direction of T Rex i.e., T Rex and Pacer Benchmark go up and down completely randomly.
Pair Corralation between T Rex and Pacer Benchmark
Given the investment horizon of 90 days T Rex 2X Long is expected to generate 4.73 times more return on investment than Pacer Benchmark. However, T Rex is 4.73 times more volatile than Pacer Benchmark Industrial. It trades about 0.09 of its potential returns per unit of risk. Pacer Benchmark Industrial is currently generating about -0.23 per unit of risk. If you would invest 1,375 in T Rex 2X Long on September 13, 2024 and sell it today you would earn a total of 325.00 from holding T Rex 2X Long or generate 23.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
T Rex 2X Long vs. Pacer Benchmark Industrial
Performance |
Timeline |
T Rex 2X |
Pacer Benchmark Indu |
T Rex and Pacer Benchmark Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with T Rex and Pacer Benchmark
The main advantage of trading using opposite T Rex and Pacer Benchmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T Rex 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.T Rex vs. Freedom Day Dividend | T Rex vs. Franklin Templeton ETF | T Rex vs. iShares MSCI China | T Rex vs. Tidal Trust II |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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