Correlation Between Xtrackers California and BlackRock High
Can any of the company-specific risk be diversified away by investing in both Xtrackers California and BlackRock High 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 BlackRock High 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 BlackRock High Yield, you can compare the effects of market volatilities on Xtrackers California and BlackRock High 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 BlackRock High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers California and BlackRock High.
Diversification Opportunities for Xtrackers California and BlackRock High
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xtrackers and BlackRock is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers California Municipal and BlackRock High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock High Yield 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 BlackRock High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock High Yield has no effect on the direction of Xtrackers California i.e., Xtrackers California and BlackRock High go up and down completely randomly.
Pair Corralation between Xtrackers California and BlackRock High
Allowing for the 90-day total investment horizon Xtrackers California Municipal is expected to generate 0.74 times more return on investment than BlackRock High. However, Xtrackers California Municipal is 1.35 times less risky than BlackRock High. It trades about 0.26 of its potential returns per unit of risk. BlackRock High Yield is currently generating about 0.16 per unit of risk. If you would invest 2,501 in Xtrackers California Municipal on September 4, 2024 and sell it today you would earn a total of 43.00 from holding Xtrackers California Municipal or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers California Municipal vs. BlackRock High Yield
Performance |
| Timeline |
| Xtrackers California |
| BlackRock High Yield |
Xtrackers California and BlackRock High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers California and BlackRock High
The main advantage of trading using opposite Xtrackers California and BlackRock High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers California position performs unexpectedly, BlackRock High 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 BlackRock High will offset losses from the drop in BlackRock High's long position.| Xtrackers California vs. BlackRock High Yield | Xtrackers California vs. Dimensional ETF Trust | Xtrackers California vs. JP Morgan Exchange Traded | Xtrackers California vs. Janus Detroit Street |
| BlackRock High vs. BlackRock Intermediate Muni | BlackRock High vs. VanEck Short High | BlackRock High vs. iShares iBonds Dec | BlackRock High vs. SPDR Nuveen Bloomberg |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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