Correlation Between SPDR Nuveen and Xtrackers California
Can any of the company-specific risk be diversified away by investing in both SPDR Nuveen 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 SPDR Nuveen and Xtrackers California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Nuveen Municipal and Xtrackers California Municipal, you can compare the effects of market volatilities on SPDR Nuveen 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 SPDR Nuveen with a short position of Xtrackers California. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Nuveen and Xtrackers California.
Diversification Opportunities for SPDR Nuveen and Xtrackers California
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Xtrackers is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Nuveen Municipal and Xtrackers California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers California and SPDR Nuveen 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 SPDR Nuveen Municipal 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 SPDR Nuveen i.e., SPDR Nuveen and Xtrackers California go up and down completely randomly.
Pair Corralation between SPDR Nuveen and Xtrackers California
Given the investment horizon of 90 days SPDR Nuveen Municipal is expected to generate 0.98 times more return on investment than Xtrackers California. However, SPDR Nuveen Municipal is 1.02 times less risky than Xtrackers California. It trades about 0.07 of its potential returns per unit of risk. Xtrackers California Municipal is currently generating about 0.05 per unit of risk. If you would invest 2,601 in SPDR Nuveen Municipal on August 26, 2024 and sell it today you would earn a total of 167.00 from holding SPDR Nuveen Municipal or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 60.66% |
| Values | Daily Returns |
SPDR Nuveen Municipal vs. Xtrackers California Municipal
Performance |
| Timeline |
| SPDR Nuveen Municipal |
| Xtrackers California |
SPDR Nuveen and Xtrackers California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Nuveen and Xtrackers California
The main advantage of trading using opposite SPDR Nuveen and Xtrackers California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Nuveen 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.| SPDR Nuveen vs. BlackRock Intermediate Muni | SPDR Nuveen vs. SSGA Active Trust | SPDR Nuveen vs. SPDR MarketAxess Investment | SPDR Nuveen vs. SSGA Active Trust |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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