Correlation Between Pacer Financial and VanEck BDC

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

Diversification Opportunities for Pacer Financial and VanEck BDC

0.68

Correlation Coefficient

Pacer Financial  VanEck BDC

Poor diversification

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

Pair Corralation between Pacer Financial and VanEck BDC

If you would invest  1,667  in VanEck BDC Income on September 23, 2024 and sell it today you would earn a total of  5.00  from holding VanEck BDC Income or generate 0.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

Pacer Financial  vs.  VanEck BDC Income

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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

VanEck BDC Income

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck BDC Income are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, VanEck BDC is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Pacer Financial and VanEck BDC

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

The idea behind Pacer Financial and VanEck BDC Income 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.