Correlation Between Pacer Swan and Tidal Trust

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

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

Diversification Opportunities for Pacer Swan and Tidal Trust

-0.28

Correlation Coefficient

Pacer Swan  Tidal Trust

Very good diversification

The 3 months correlation between Pacer and Tidal is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Swan SOS and Tidal Trust II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal Trust II and Pacer Swan 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 Swan SOS are associated (or correlated) with Tidal Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal Trust II has no effect on the direction of Pacer Swan i.e., Pacer Swan and Tidal Trust go up and down completely randomly.

Pair Corralation between Pacer Swan and Tidal Trust

Given the investment horizon of 90 days Pacer Swan SOS is expected to generate 0.11 times more return on investment than Tidal Trust. However, Pacer Swan SOS is 9.28 times less risky than Tidal Trust. It trades about 0.31 of its potential returns per unit of risk. Tidal Trust II is currently generating about 0.01 per unit of risk. If you would invest  3,200  in Pacer Swan SOS on September 12, 2024 and sell it today you would earn a total of  108.50  from holding Pacer Swan SOS or generate 3.39% return on investment over 90 days.

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

Pacer Swan SOS  vs.  Tidal Trust II

Pacer Swan SOS

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pacer Swan SOS are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Pacer Swan is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Tidal Trust II

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tidal Trust II are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Tidal Trust 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 Swan and Tidal Trust

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

The idea behind Pacer Swan SOS and Tidal Trust II 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.