Correlation Between Xtrackers California and Tema ETF
Can any of the company-specific risk be diversified away by investing in both Xtrackers California and Tema ETF 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 Tema ETF 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 Tema ETF Trust, you can compare the effects of market volatilities on Xtrackers California and Tema ETF 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 Tema ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers California and Tema ETF.
Diversification Opportunities for Xtrackers California and Tema ETF
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Xtrackers and Tema is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers California Municipal and Tema ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tema ETF Trust 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 Tema ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tema ETF Trust has no effect on the direction of Xtrackers California i.e., Xtrackers California and Tema ETF go up and down completely randomly.
Pair Corralation between Xtrackers California and Tema ETF
Allowing for the 90-day total investment horizon Xtrackers California Municipal is expected to generate 0.24 times more return on investment than Tema ETF. However, Xtrackers California Municipal is 4.11 times less risky than Tema ETF. It trades about 0.03 of its potential returns per unit of risk. Tema ETF Trust is currently generating about -0.01 per unit of risk. If you would invest 2,445 in Xtrackers California Municipal on October 25, 2024 and sell it today you would earn a total of 43.00 from holding Xtrackers California Municipal or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 64.87% |
| Values | Daily Returns |
Xtrackers California Municipal vs. Tema ETF Trust
Performance |
| Timeline |
| Xtrackers California |
| Tema ETF Trust |
Xtrackers California and Tema ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers California and Tema ETF
The main advantage of trading using opposite Xtrackers California and Tema ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers California position performs unexpectedly, Tema ETF 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 Tema ETF will offset losses from the drop in Tema ETF'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 |
| Tema ETF vs. Smith Nephew SNATS | Tema ETF vs. Fresenius Medical Care | Tema ETF vs. Fomento Economico Mexicano | Tema ETF vs. The Cooper Companies, |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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