Correlation Between Pacer Financial and VanEck ETF

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

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

Diversification Opportunities for Pacer Financial and VanEck ETF

0.0

Correlation Coefficient

Pacer Financial  VanEck ETF

Pay attention - limited upside

The 3 months correlation between Pacer and VanEck is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Financial and VanEck ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck ETF Trust and Pacer Financial 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 Financial are associated (or correlated) with VanEck ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck ETF Trust has no effect on the direction of Pacer Financial i.e., Pacer Financial and VanEck ETF go up and down completely randomly.

Pair Corralation between Pacer Financial and VanEck ETF

If you would invest (100.00) in Pacer Financial on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Pacer Financial or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Pacer Financial  vs.  VanEck ETF Trust

Pacer Financial

Risk-Adjusted Performance

Very Weak

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

VanEck ETF Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days VanEck ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the ETF venture institutional investors.

Pair Trading with Pacer Financial and VanEck ETF

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

The idea behind Pacer Financial and VanEck ETF 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.