Correlation Between Pacer Funds and Simplify Exchange

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

By analyzing existing cross correlation between Pacer Funds Trust and Simplify Exchange Traded, you can compare the effects of market volatilities on Pacer Funds and Simplify Exchange 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 Funds with a short position of Simplify Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacer Funds and Simplify Exchange.

Diversification Opportunities for Pacer Funds and Simplify Exchange

0.23

Correlation Coefficient

Pacer Funds  Simplify Exchange

Modest diversification

The 3 months correlation between Pacer and Simplify is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Pacer Funds Trust and Simplify Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Exchange Traded and Pacer Funds 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 Funds Trust are associated (or correlated) with Simplify Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Exchange Traded has no effect on the direction of Pacer Funds i.e., Pacer Funds and Simplify Exchange go up and down completely randomly.

Pair Corralation between Pacer Funds and Simplify Exchange

Given the investment horizon of 90 days Pacer Funds Trust is expected to generate 0.07 times more return on investment than Simplify Exchange. However, Pacer Funds Trust is 13.41 times less risky than Simplify Exchange. It trades about 0.22 of its potential returns per unit of risk. Simplify Exchange Traded is currently generating about -0.11 per unit of risk. If you would invest  2,172  in Pacer Funds Trust on May 17, 2025 and sell it today you would earn a total of  200.87  from holding Pacer Funds Trust or generate 9.25% return on investment over 90 days.

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

Pacer Funds Trust  vs.  Simplify Exchange Traded

Pacer Funds Trust

Risk-Adjusted Performance

Solid

Over the last 90 days Pacer Funds Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite weak fundamental drivers, Pacer Funds may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Simplify Exchange Traded

Risk-Adjusted Performance

Weakest

Over the last 90 days Simplify Exchange Traded has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Pair Trading with Pacer Funds and Simplify Exchange

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

The idea behind Pacer Funds Trust and Simplify Exchange Traded 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.