Correlation Between Xtrackers California and Touchstone ETF
Can any of the company-specific risk be diversified away by investing in both Xtrackers California and Touchstone 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 Touchstone 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 Touchstone ETF Trust, you can compare the effects of market volatilities on Xtrackers California and Touchstone 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 Touchstone ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers California and Touchstone ETF.
Diversification Opportunities for Xtrackers California and Touchstone ETF
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Xtrackers and Touchstone is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers California Municipal and Touchstone ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone 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 Touchstone ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone ETF Trust has no effect on the direction of Xtrackers California i.e., Xtrackers California and Touchstone ETF go up and down completely randomly.
Pair Corralation between Xtrackers California and Touchstone ETF
Allowing for the 90-day total investment horizon Xtrackers California Municipal is expected to under-perform the Touchstone ETF. In addition to that, Xtrackers California is 3.2 times more volatile than Touchstone ETF Trust. It trades about -0.11 of its total potential returns per unit of risk. Touchstone ETF Trust is currently generating about 0.02 per unit of volatility. If you would invest 2,532 in Touchstone ETF Trust on November 3, 2024 and sell it today you would earn a total of 1.00 from holding Touchstone ETF Trust or generate 0.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers California Municipal vs. Touchstone ETF Trust
Performance |
| Timeline |
| Xtrackers California |
| Touchstone ETF Trust |
Xtrackers California and Touchstone ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers California and Touchstone ETF
The main advantage of trading using opposite Xtrackers California and Touchstone ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers California position performs unexpectedly, Touchstone 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 Touchstone ETF will offset losses from the drop in Touchstone 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 |
| Touchstone ETF vs. VanEck Vectors Moodys | Touchstone ETF vs. Valued Advisers Trust | Touchstone ETF vs. Xtrackers California Municipal | Touchstone ETF vs. Principal Exchange Traded Funds |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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