Correlation Between Pacer Cash and SGI Enhanced

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

By analyzing existing cross correlation between Pacer Cash Cows and SGI Enhanced Global, you can compare the effects of market volatilities on Pacer Cash and SGI Enhanced 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 Cash with a short position of SGI Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacer Cash and SGI Enhanced.

Diversification Opportunities for Pacer Cash and SGI Enhanced

0.0

Correlation Coefficient

Pacer Cash  SGI Enhanced

Pay attention - limited upside

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

Pair Corralation between Pacer Cash and SGI Enhanced

If you would invest  3,796  in Pacer Cash Cows on September 12, 2024 and sell it today you would earn a total of  202.00  from holding Pacer Cash Cows or generate 5.32% return on investment over 90 days.

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

Pacer Cash Cows  vs.  SGI Enhanced Global

Pacer Cash Cows

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pacer Cash Cows are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Pacer Cash is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

SGI Enhanced Global

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days SGI Enhanced Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, SGI Enhanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pacer Cash and SGI Enhanced

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

The idea behind Pacer Cash Cows and SGI Enhanced Global 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.