Correlation Between Xtrackers California and SPDR Nuveen
Can any of the company-specific risk be diversified away by investing in both Xtrackers California and SPDR Nuveen 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 SPDR Nuveen 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 SPDR Nuveen Municipal, you can compare the effects of market volatilities on Xtrackers California and SPDR Nuveen 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 SPDR Nuveen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers California and SPDR Nuveen.
Diversification Opportunities for Xtrackers California and SPDR Nuveen
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xtrackers and SPDR is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers California Municipal and SPDR Nuveen Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Nuveen Municipal 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 SPDR Nuveen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Nuveen Municipal has no effect on the direction of Xtrackers California i.e., Xtrackers California and SPDR Nuveen go up and down completely randomly.
Pair Corralation between Xtrackers California and SPDR Nuveen
Allowing for the 90-day total investment horizon Xtrackers California Municipal is expected to generate 0.92 times more return on investment than SPDR Nuveen. However, Xtrackers California Municipal is 1.09 times less risky than SPDR Nuveen. It trades about 0.17 of its potential returns per unit of risk. SPDR Nuveen Municipal is currently generating about 0.08 per unit of risk. If you would invest 2,497 in Xtrackers California Municipal on August 26, 2024 and sell it today you would earn a total of 26.00 from holding Xtrackers California Municipal or generate 1.04% 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. SPDR Nuveen Municipal
Performance |
| Timeline |
| Xtrackers California |
| SPDR Nuveen Municipal |
Xtrackers California and SPDR Nuveen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers California and SPDR Nuveen
The main advantage of trading using opposite Xtrackers California and SPDR Nuveen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers California position performs unexpectedly, SPDR Nuveen 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 SPDR Nuveen will offset losses from the drop in SPDR Nuveen's long position.| Xtrackers California vs. SSGA Active Trust | Xtrackers California vs. SPDR Nuveen Municipal | Xtrackers California vs. iShares Short Maturity | Xtrackers California vs. First Trust Flexible |
| SPDR Nuveen vs. BlackRock Intermediate Muni | SPDR Nuveen vs. SSGA Active Trust | SPDR Nuveen vs. SPDR MarketAxess Investment | SPDR Nuveen vs. SSGA Active Trust |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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