Correlation Between Pacer Financial and Bondbloxx ETF

Can any of the company-specific risk be diversified away by investing in both Pacer Financial and Bondbloxx 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 Bondbloxx 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 Bondbloxx ETF Trust, you can compare the effects of market volatilities on Pacer Financial and Bondbloxx 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 Bondbloxx ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacer Financial and Bondbloxx ETF.

Diversification Opportunities for Pacer Financial and Bondbloxx ETF

-0.68

Correlation Coefficient

Pacer Financial  Bondbloxx ETF

Excellent diversification

The 3 months correlation between Pacer and Bondbloxx is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Financial and Bondbloxx ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bondbloxx 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 Bondbloxx ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bondbloxx ETF Trust has no effect on the direction of Pacer Financial i.e., Pacer Financial and Bondbloxx ETF go up and down completely randomly.

Pair Corralation between Pacer Financial and Bondbloxx ETF

Given the investment horizon of 90 days Pacer Financial is expected to generate 1.57 times more return on investment than Bondbloxx ETF. However, Pacer Financial is 1.57 times more volatile than Bondbloxx ETF Trust. It trades about 0.2 of its potential returns per unit of risk. Bondbloxx ETF Trust is currently generating about 0.03 per unit of risk. If you would invest  3,002  in Pacer Financial on September 23, 2024 and sell it today you would earn a total of  1,001  from holding Pacer Financial or generate 33.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	81.85%
Values	Daily Returns

Pacer Financial  vs.  Bondbloxx ETF Trust

Pacer Financial

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Pacer Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Pacer Financial is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Bondbloxx ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bondbloxx ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Bondbloxx ETF is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Pacer Financial and Bondbloxx ETF

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

The idea behind Pacer Financial and Bondbloxx 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.