Correlation Between Pacer Export and SPDR SSGA

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

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

Diversification Opportunities for Pacer Export and SPDR SSGA

0.51

Correlation Coefficient

Pacer Export  SPDR SSGA

Very weak diversification

The 3 months correlation between Pacer and SPDR is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Export Leaders and SPDR SSGA Gender in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSGA Gender and Pacer Export 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 Export Leaders are associated (or correlated) with SPDR SSGA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SSGA Gender has no effect on the direction of Pacer Export i.e., Pacer Export and SPDR SSGA go up and down completely randomly.

Pair Corralation between Pacer Export and SPDR SSGA

Given the investment horizon of 90 days Pacer Export Leaders is expected to generate 1.38 times more return on investment than SPDR SSGA. However, Pacer Export is 1.38 times more volatile than SPDR SSGA Gender. It trades about -0.1 of its potential returns per unit of risk. SPDR SSGA Gender is currently generating about -0.19 per unit of risk. If you would invest  5,017  in Pacer Export Leaders on October 11, 2024 and sell it today you would lose (110.00) from holding Pacer Export Leaders or give up 2.19% of portfolio value over 90 days.

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

Pacer Export Leaders  vs.  SPDR SSGA Gender

Pacer Export Leaders

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pacer Export Leaders has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Pacer Export is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

SPDR SSGA Gender

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR SSGA Gender are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical indicators, SPDR SSGA is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Pacer Export and SPDR SSGA

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

The idea behind Pacer Export Leaders and SPDR SSGA Gender 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.