Correlation Between BondBloxx ETF and Xtrackers California
Can any of the company-specific risk be diversified away by investing in both BondBloxx ETF and Xtrackers California 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 BondBloxx ETF and Xtrackers California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BondBloxx ETF Trust and Xtrackers California Municipal, you can compare the effects of market volatilities on BondBloxx ETF and Xtrackers California 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 BondBloxx ETF with a short position of Xtrackers California. Check out your portfolio center. Please also check ongoing floating volatility patterns of BondBloxx ETF and Xtrackers California.
Diversification Opportunities for BondBloxx ETF and Xtrackers California
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BondBloxx and Xtrackers is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding BondBloxx ETF Trust and Xtrackers California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers California and BondBloxx ETF 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 BondBloxx ETF Trust are associated (or correlated) with Xtrackers California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers California has no effect on the direction of BondBloxx ETF i.e., BondBloxx ETF and Xtrackers California go up and down completely randomly.
Pair Corralation between BondBloxx ETF and Xtrackers California
Given the investment horizon of 90 days BondBloxx ETF Trust is expected to generate 1.49 times more return on investment than Xtrackers California. However, BondBloxx ETF is 1.49 times more volatile than Xtrackers California Municipal. It trades about 0.08 of its potential returns per unit of risk. Xtrackers California Municipal is currently generating about 0.07 per unit of risk. If you would invest 4,834 in BondBloxx ETF Trust on September 3, 2024 and sell it today you would earn a total of 289.00 from holding BondBloxx ETF Trust or generate 5.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 88.89% |
| Values | Daily Returns |
BondBloxx ETF Trust vs. Xtrackers California Municipal
Performance |
| Timeline |
| BondBloxx ETF Trust |
| Xtrackers California |
BondBloxx ETF and Xtrackers California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BondBloxx ETF and Xtrackers California
The main advantage of trading using opposite BondBloxx ETF and Xtrackers California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BondBloxx ETF position performs unexpectedly, Xtrackers California 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 Xtrackers California will offset losses from the drop in Xtrackers California's long position.| BondBloxx ETF vs. VanEck Vectors Moodys | BondBloxx ETF vs. Xtrackers California Municipal | BondBloxx ETF vs. Vanguard ESG Corporate | BondBloxx ETF vs. Vanguard Intermediate Term Corporate |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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