Correlation Between Pacer Pacific and First Trust
Can any of the company-specific risk be diversified away by investing in both Pacer Pacific and First Trust 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 Pacific and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacer Pacific Asset and First Trust Senior, you can compare the effects of market volatilities on Pacer Pacific and First Trust 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 Pacific with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacer Pacific and First Trust.
Diversification Opportunities for Pacer Pacific and First Trust
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Pacer and First is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Pacific Asset and First Trust Senior in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Senior and Pacer Pacific 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 Pacific Asset are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Senior has no effect on the direction of Pacer Pacific i.e., Pacer Pacific and First Trust go up and down completely randomly.
Pair Corralation between Pacer Pacific and First Trust
Given the investment horizon of 90 days Pacer Pacific Asset is expected to generate 1.52 times more return on investment than First Trust. However, Pacer Pacific is 1.52 times more volatile than First Trust Senior. It trades about 0.33 of its potential returns per unit of risk. First Trust Senior is currently generating about 0.49 per unit of risk. If you would invest 4,652 in Pacer Pacific Asset on June 9, 2025 and sell it today you would earn a total of 88.00 from holding Pacer Pacific Asset or generate 1.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacer Pacific Asset vs. First Trust Senior
Performance |
| Timeline |
| Pacer Pacific Asset |
| First Trust Senior |
Pacer Pacific and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacer Pacific and First Trust
The main advantage of trading using opposite Pacer Pacific and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacer Pacific position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Pacer Pacific vs. Franklin Liberty Senior | Pacer Pacific vs. SPDR Bloomberg Investment | Pacer Pacific vs. VanEck Investment Grade | Pacer Pacific vs. Franklin Liberty Short |
| First Trust vs. First Trust Tactical | First Trust vs. First Trust Low | First Trust vs. First Trust Enhanced | First Trust vs. First Trust Managed |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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