Correlation Between Xtrackers Harvest and High-yield Municipal
Can any of the company-specific risk be diversified away by investing in both Xtrackers Harvest and High-yield Municipal 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 Xtrackers Harvest and High-yield Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers Harvest CSI and High Yield Municipal Fund, you can compare the effects of market volatilities on Xtrackers Harvest and High-yield Municipal 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 Xtrackers Harvest with a short position of High-yield Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Harvest and High-yield Municipal.
Diversification Opportunities for Xtrackers Harvest and High-yield Municipal
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xtrackers and High-yield is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Harvest CSI and High Yield Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Municipal and Xtrackers Harvest 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 Xtrackers Harvest CSI are associated (or correlated) with High-yield Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Municipal has no effect on the direction of Xtrackers Harvest i.e., Xtrackers Harvest and High-yield Municipal go up and down completely randomly.
Pair Corralation between Xtrackers Harvest and High-yield Municipal
Given the investment horizon of 90 days Xtrackers Harvest CSI is expected to under-perform the High-yield Municipal. In addition to that, Xtrackers Harvest is 2.44 times more volatile than High Yield Municipal Fund. It trades about -0.16 of its total potential returns per unit of risk. High Yield Municipal Fund is currently generating about -0.12 per unit of volatility. If you would invest 878.00 in High Yield Municipal Fund on January 18, 2025 and sell it today you would lose (26.00) from holding High Yield Municipal Fund or give up 2.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers Harvest CSI vs. High Yield Municipal Fund
Performance |
| Timeline |
| Xtrackers Harvest CSI |
| High Yield Municipal |
Xtrackers Harvest and High-yield Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers Harvest and High-yield Municipal
The main advantage of trading using opposite Xtrackers Harvest and High-yield Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Harvest position performs unexpectedly, High-yield Municipal 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 High-yield Municipal will offset losses from the drop in High-yield Municipal's long position.| Xtrackers Harvest vs. Xtrackers Harvest CSI | Xtrackers Harvest vs. Direxion Daily CSI | Xtrackers Harvest vs. iShares MSCI China | Xtrackers Harvest vs. KraneShares Bosera MSCI |
| High-yield Municipal vs. High Yield Fund Investor | High-yield Municipal vs. Intermediate Term Tax Free Bond | High-yield Municipal vs. California High Yield Municipal | High-yield Municipal vs. T Rowe Price |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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