Correlation Between Pace Strategic and Large-cap Growth

Can any of the company-specific risk be diversified away by investing in both Pace Strategic and Large-cap 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 Strategic and Large-cap Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pace Strategic Fixed and Large Cap Growth Profund, you can compare the effects of market volatilities on Pace Strategic and Large-cap 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 Strategic with a short position of Large-cap Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Strategic and Large-cap Growth.

Diversification Opportunities for Pace Strategic and Large-cap Growth

0.86

Correlation Coefficient

Pace Strategic  Large-cap Growth

Very poor diversification

The 3 months correlation between Pace and Large-cap is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Pace Strategic Fixed and Large Cap Growth Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap Growth and Pace Strategic 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 Strategic Fixed are associated (or correlated) with Large-cap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Growth has no effect on the direction of Pace Strategic i.e., Pace Strategic and Large-cap Growth go up and down completely randomly.

Pair Corralation between Pace Strategic and Large-cap Growth

Assuming the 90 days horizon Pace Strategic is expected to generate 5.34 times less return on investment than Large-cap Growth. But when comparing it to its historical volatility, Pace Strategic Fixed is 4.06 times less risky than Large-cap Growth. It trades about 0.13 of its potential returns per unit of risk. Large Cap Growth Profund is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  5,068  in Large Cap Growth Profund on August 3, 2025 and sell it today you would earn a total of  468.00  from holding Large Cap Growth Profund or generate 9.23% return on investment over 90 days.

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

Pace Strategic Fixed  vs.  Large Cap Growth Profund

Pace Strategic Fixed

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Pace Strategic Fixed are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pace Strategic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Large Cap Growth

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Large Cap Growth Profund are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Large-cap Growth may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with Pace Strategic and Large-cap Growth

The main advantage of trading using opposite Pace Strategic and Large-cap Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Strategic position performs unexpectedly, Large-cap 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 Large-cap Growth will offset losses from the drop in Large-cap Growth's long position.

The idea behind Pace Strategic Fixed and Large Cap Growth Profund 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.

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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.