Correlation Between Pace International and Equity Growth
Can any of the company-specific risk be diversified away by investing in both Pace International and Equity Growth 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 Pace International and Equity Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace International Emerging and Equity Growth Fund, you can compare the effects of market volatilities on Pace International and Equity Growth 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 Pace International with a short position of Equity Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace International and Equity Growth.
Diversification Opportunities for Pace International and Equity Growth
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pace and Equity is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Pace International Emerging and Equity Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Growth and Pace International 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 Pace International Emerging are associated (or correlated) with Equity Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Growth has no effect on the direction of Pace International i.e., Pace International and Equity Growth go up and down completely randomly.
Pair Corralation between Pace International and Equity Growth
Assuming the 90 days horizon Pace International Emerging is expected to generate 1.08 times more return on investment than Equity Growth. However, Pace International is 1.08 times more volatile than Equity Growth Fund. It trades about 0.25 of its potential returns per unit of risk. Equity Growth Fund is currently generating about 0.25 per unit of risk. If you would invest 1,424 in Pace International Emerging on May 30, 2025 and sell it today you would earn a total of 156.00 from holding Pace International Emerging or generate 10.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Pace International Emerging vs. Equity Growth Fund
Performance |
| Timeline |
| Pace International |
| Equity Growth |
Pace International and Equity Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace International and Equity Growth
The main advantage of trading using opposite Pace International and Equity Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace International position performs unexpectedly, Equity Growth 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 Equity Growth will offset losses from the drop in Equity Growth's long position.| Pace International vs. Dunham Porategovernment Bond | Pace International vs. Federated Government Income | Pace International vs. Franklin Adjustable Government | Pace International vs. Aig Government Money |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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