Correlation Between Akros Monthly and Pacer Financial

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

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

Diversification Opportunities for Akros Monthly and Pacer Financial

0.72

Correlation Coefficient

Akros Monthly  Pacer Financial

Poor diversification

The 3 months correlation between Akros and Pacer is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Akros Monthly Payout and Pacer Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Financial and Akros Monthly 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 Akros Monthly Payout are associated (or correlated) with Pacer Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Financial has no effect on the direction of Akros Monthly i.e., Akros Monthly and Pacer Financial go up and down completely randomly.

Pair Corralation between Akros Monthly and Pacer Financial

Given the investment horizon of 90 days Akros Monthly Payout is expected to under-perform the Pacer Financial. In addition to that, Akros Monthly is 4.36 times more volatile than Pacer Financial. It trades about -0.12 of its total potential returns per unit of risk. Pacer Financial is currently generating about 0.33 per unit of volatility. If you would invest  1,353  in Pacer Financial on September 17, 2024 and sell it today you would earn a total of  278.45  from holding Pacer Financial or generate 20.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	32.31%
Values	Daily Returns

Akros Monthly Payout  vs.  Pacer Financial

Akros Monthly Payout

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Akros Monthly Payout has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Pacer Financial

Risk-Adjusted Performance

0 of 100

Strong

Over the last 90 days Pacer Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak basic indicators, Pacer Financial showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Akros Monthly and Pacer Financial

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

The idea behind Akros Monthly Payout and Pacer Financial 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.