Correlation Between Pacer Lunt and Pacer Funds
Can any of the company-specific risk be diversified away by investing in both Pacer Lunt and Pacer Funds 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 Pacer Funds 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 Pacer Funds Trust, you can compare the effects of market volatilities on Pacer Lunt and Pacer Funds 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 Pacer Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacer Lunt and Pacer Funds.
Diversification Opportunities for Pacer Lunt and Pacer Funds
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pacer and Pacer is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Lunt Large and Pacer Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Funds Trust 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 Pacer Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Funds Trust has no effect on the direction of Pacer Lunt i.e., Pacer Lunt and Pacer Funds go up and down completely randomly.
Pair Corralation between Pacer Lunt and Pacer Funds
Given the investment horizon of 90 days Pacer Lunt Large is expected to under-perform the Pacer Funds. But the etf apears to be less risky and, when comparing its historical volatility, Pacer Lunt Large is 1.35 times less risky than Pacer Funds. The etf trades about -0.01 of its potential returns per unit of risk. The Pacer Funds Trust is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,675 in Pacer Funds Trust on March 17, 2025 and sell it today you would earn a total of 177.00 from holding Pacer Funds Trust or generate 4.82% 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. Pacer Funds Trust
Performance |
| Timeline |
| Pacer Lunt Large |
| Pacer Funds Trust |
Pacer Lunt and Pacer Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacer Lunt and Pacer Funds
The main advantage of trading using opposite Pacer Lunt and Pacer Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacer Lunt position performs unexpectedly, Pacer Funds 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 Funds will offset losses from the drop in Pacer Funds' long position.| Pacer Lunt vs. Pacer Lunt Large | Pacer Lunt vs. Pacer Lunt MidCap | Pacer Lunt vs. Pacer Trendpilot Bond | Pacer Lunt vs. Pacer Small Cap |
| Pacer Funds vs. Pacer Lunt Large | Pacer Funds vs. Pacer Developed Markets | Pacer Funds vs. Pacer Lunt Large | Pacer Funds vs. Pacer Small Cap |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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