Correlation Between Pacer Lunt and IShares Morningstar
Can any of the company-specific risk be diversified away by investing in both Pacer Lunt and IShares Morningstar 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 Lunt and IShares Morningstar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacer Lunt Large and iShares Morningstar Small Cap, you can compare the effects of market volatilities on Pacer Lunt and IShares Morningstar 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 Lunt with a short position of IShares Morningstar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacer Lunt and IShares Morningstar.
Diversification Opportunities for Pacer Lunt and IShares Morningstar
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pacer and IShares is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Lunt Large and iShares Morningstar Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Morningstar and Pacer Lunt 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 Lunt Large are associated (or correlated) with IShares Morningstar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Morningstar has no effect on the direction of Pacer Lunt i.e., Pacer Lunt and IShares Morningstar go up and down completely randomly.
Pair Corralation between Pacer Lunt and IShares Morningstar
Given the investment horizon of 90 days Pacer Lunt is expected to generate 4.28 times less return on investment than IShares Morningstar. But when comparing it to its historical volatility, Pacer Lunt Large is 1.58 times less risky than IShares Morningstar. It trades about 0.01 of its potential returns per unit of risk. iShares Morningstar Small Cap is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 6,037 in iShares Morningstar Small Cap on August 20, 2025 and sell it today you would earn a total of 94.00 from holding iShares Morningstar Small Cap or generate 1.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacer Lunt Large vs. iShares Morningstar Small Cap
Performance |
| Timeline |
| Pacer Lunt Large |
| iShares Morningstar |
Pacer Lunt and IShares Morningstar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacer Lunt and IShares Morningstar
The main advantage of trading using opposite Pacer Lunt and IShares Morningstar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacer Lunt position performs unexpectedly, IShares Morningstar 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 IShares Morningstar will offset losses from the drop in IShares Morningstar's long position.| Pacer Lunt vs. Northern Lights | Pacer Lunt vs. AGFiQ Market Neutral | Pacer Lunt vs. Segall Bryant Hamill | Pacer Lunt vs. Innovator Russell 2000 |
| IShares Morningstar vs. iShares MSCI Malaysia | IShares Morningstar vs. Oppenheimer Russell 2000 | IShares Morningstar vs. Global X MSCI | IShares Morningstar vs. American Century STOXX |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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