Correlation Between Xtrackers California and Global X
Can any of the company-specific risk be diversified away by investing in both Xtrackers California and Global X 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 California and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers California Municipal and Global X Funds, you can compare the effects of market volatilities on Xtrackers California and Global X 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 California with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers California and Global X.
Diversification Opportunities for Xtrackers California and Global X
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Xtrackers and Global is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers California Municipal and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds and Xtrackers California 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 California Municipal are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Funds has no effect on the direction of Xtrackers California i.e., Xtrackers California and Global X go up and down completely randomly.
Pair Corralation between Xtrackers California and Global X
Allowing for the 90-day total investment horizon Xtrackers California Municipal is expected to under-perform the Global X. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers California Municipal is 3.89 times less risky than Global X. The etf trades about -0.1 of its potential returns per unit of risk. The Global X Funds is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,647 in Global X Funds on November 4, 2024 and sell it today you would earn a total of 22.00 from holding Global X Funds or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Xtrackers California Municipal vs. Global X Funds
Performance |
| Timeline |
| Xtrackers California |
| Global X Funds |
Xtrackers California and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers California and Global X
The main advantage of trading using opposite Xtrackers California and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers California position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Xtrackers California vs. VanEck Vectors Moodys | Xtrackers California vs. Valued Advisers Trust | Xtrackers California vs. Principal Exchange Traded Funds | Xtrackers California vs. Vanguard ESG Corporate |
| Global X vs. iShares Dividend and | Global X vs. Martin Currie Sustainable | Global X vs. VictoryShares THB Mid | Global X vs. Mast Global Battery |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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