Correlation Between Xtrackers Emerging and Xtrackers California
Can any of the company-specific risk be diversified away by investing in both Xtrackers Emerging and Xtrackers California 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 Emerging and Xtrackers California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers Emerging Markets and Xtrackers California Municipal, you can compare the effects of market volatilities on Xtrackers Emerging and Xtrackers California 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 Emerging with a short position of Xtrackers California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Emerging and Xtrackers California.
Diversification Opportunities for Xtrackers Emerging and Xtrackers California
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xtrackers and Xtrackers is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Emerging Markets and Xtrackers California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers California and Xtrackers Emerging 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 Emerging Markets are associated (or correlated) with Xtrackers California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers California has no effect on the direction of Xtrackers Emerging i.e., Xtrackers Emerging and Xtrackers California go up and down completely randomly.
Pair Corralation between Xtrackers Emerging and Xtrackers California
If you would invest 2,501 in Xtrackers California Municipal on August 27, 2024 and sell it today you would earn a total of 22.00 from holding Xtrackers California Municipal or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Xtrackers Emerging Markets vs. Xtrackers California Municipal
Performance |
| Timeline |
| Xtrackers Emerging |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Xtrackers California |
Xtrackers Emerging and Xtrackers California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers Emerging and Xtrackers California
The main advantage of trading using opposite Xtrackers Emerging and Xtrackers California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Emerging position performs unexpectedly, Xtrackers California 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 Xtrackers California will offset losses from the drop in Xtrackers California's long position.| Xtrackers Emerging vs. FlexShares Morningstar Emerging | Xtrackers Emerging vs. Invesco SP Emerging | Xtrackers Emerging vs. First Trust Emerging |
| Xtrackers California vs. SSGA Active Trust | Xtrackers California vs. SPDR Nuveen Municipal | Xtrackers California vs. iShares Short Maturity | Xtrackers California vs. First Trust Flexible |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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