Correlation Between IShares Short and Xtrackers California
Can any of the company-specific risk be diversified away by investing in both IShares Short 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 IShares Short and Xtrackers California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Short Maturity and Xtrackers California Municipal, you can compare the effects of market volatilities on IShares Short 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 IShares Short with a short position of Xtrackers California. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Short and Xtrackers California.
Diversification Opportunities for IShares Short and Xtrackers California
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between IShares and Xtrackers is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding iShares Short Maturity and Xtrackers California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers California and IShares Short 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 iShares Short Maturity 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 IShares Short i.e., IShares Short and Xtrackers California go up and down completely randomly.
Pair Corralation between IShares Short and Xtrackers California
Given the investment horizon of 90 days iShares Short Maturity is expected to generate 0.25 times more return on investment than Xtrackers California. However, iShares Short Maturity is 3.92 times less risky than Xtrackers California. It trades about 0.26 of its potential returns per unit of risk. Xtrackers California Municipal is currently generating about 0.06 per unit of risk. If you would invest 4,839 in iShares Short Maturity on August 29, 2024 and sell it today you would earn a total of 184.50 from holding iShares Short Maturity or generate 3.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.79% |
| Values | Daily Returns |
iShares Short Maturity vs. Xtrackers California Municipal
Performance |
| Timeline |
| iShares Short Maturity |
| Xtrackers California |
IShares Short and Xtrackers California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Short and Xtrackers California
The main advantage of trading using opposite IShares Short and Xtrackers California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Short 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.| IShares Short vs. iShares Interest Rate | IShares Short vs. ABIVAX Socit Anonyme | IShares Short vs. HUMANA INC | IShares Short vs. SCOR PK |
| Xtrackers California vs. IQ MacKay Municipal | Xtrackers California vs. IQ MacKay Municipal | Xtrackers California vs. ALPS Intermediate Municipal | Xtrackers California vs. MYMF |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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