Correlation Between Vanguard Growth and Pacer Funds
Can any of the company-specific risk be diversified away by investing in both Vanguard Growth 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 Vanguard Growth and Pacer Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Growth Index and Pacer Funds Trust, you can compare the effects of market volatilities on Vanguard Growth 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 Vanguard Growth with a short position of Pacer Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Growth and Pacer Funds.
Diversification Opportunities for Vanguard Growth and Pacer Funds
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VANGUARD and Pacer is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Growth Index 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 Vanguard Growth 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 Vanguard Growth Index 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 Vanguard Growth i.e., Vanguard Growth and Pacer Funds go up and down completely randomly.
Pair Corralation between Vanguard Growth and Pacer Funds
Assuming the 90 days horizon Vanguard Growth is expected to generate 1.11 times less return on investment than Pacer Funds. But when comparing it to its historical volatility, Vanguard Growth Index is 1.01 times less risky than Pacer Funds. It trades about 0.07 of its potential returns per unit of risk. Pacer Funds Trust is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,816 in Pacer Funds Trust on March 25, 2025 and sell it today you would earn a total of 36.00 from holding Pacer Funds Trust or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Growth Index vs. Pacer Funds Trust
Performance |
| Timeline |
| Vanguard Growth Index |
| Pacer Funds Trust |
Vanguard Growth and Pacer Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Growth and Pacer Funds
The main advantage of trading using opposite Vanguard Growth and Pacer Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Growth 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.| Vanguard Growth vs. Vanguard Value Index | Vanguard Growth vs. Vanguard Mid Cap Index | Vanguard Growth vs. Vanguard Small Cap Growth | Vanguard Growth vs. Vanguard 500 Index |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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