Correlation Between Site Centers and Pacer Benchmark

Can any of the company-specific risk be diversified away by investing in both Site Centers and Pacer Benchmark 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 Site Centers and Pacer Benchmark into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Site Centers Corp and Pacer Benchmark Industrial, you can compare the effects of market volatilities on Site Centers and Pacer Benchmark 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 Site Centers with a short position of Pacer Benchmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Site Centers and Pacer Benchmark.

Diversification Opportunities for Site Centers and Pacer Benchmark

0.58

Correlation Coefficient

Site Centers  Pacer Benchmark

Very weak diversification

The 3 months correlation between Site and Pacer is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Site Centers Corp and Pacer Benchmark Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Benchmark Indu and Site Centers 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 Site Centers Corp are associated (or correlated) with Pacer Benchmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Benchmark Indu has no effect on the direction of Site Centers i.e., Site Centers and Pacer Benchmark go up and down completely randomly.

Pair Corralation between Site Centers and Pacer Benchmark

Given the investment horizon of 90 days Site Centers Corp is expected to generate 0.77 times more return on investment than Pacer Benchmark. However, Site Centers Corp is 1.3 times less risky than Pacer Benchmark. It trades about 0.31 of its potential returns per unit of risk. Pacer Benchmark Industrial is currently generating about 0.01 per unit of risk. If you would invest  1,388  in Site Centers Corp on March 12, 2024 and sell it today you would earn a total of  77.00  from holding Site Centers Corp or generate 5.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Site Centers Corp  vs.  Pacer Benchmark Industrial

Site Centers Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Site Centers Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Site Centers is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pacer Benchmark Indu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pacer Benchmark Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Pacer Benchmark is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Site Centers and Pacer Benchmark

The main advantage of trading using opposite Site Centers and Pacer Benchmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Site Centers position performs unexpectedly, Pacer Benchmark 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 Benchmark will offset losses from the drop in Pacer Benchmark's long position.

The idea behind Site Centers Corp and Pacer Benchmark Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.