Correlation Between Xtrackers Municipal and SPDR Nuveen
Can any of the company-specific risk be diversified away by investing in both Xtrackers Municipal 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 Municipal 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 Municipal Infrastructure and SPDR Nuveen Bloomberg, you can compare the effects of market volatilities on Xtrackers Municipal 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 Municipal with a short position of SPDR Nuveen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Municipal and SPDR Nuveen.
Diversification Opportunities for Xtrackers Municipal 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 Municipal Infrastruc and SPDR Nuveen Bloomberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Nuveen Bloomberg and Xtrackers Municipal 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 Municipal Infrastructure 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 Bloomberg has no effect on the direction of Xtrackers Municipal i.e., Xtrackers Municipal and SPDR Nuveen go up and down completely randomly.
Pair Corralation between Xtrackers Municipal and SPDR Nuveen
Given the investment horizon of 90 days Xtrackers Municipal Infrastructure is expected to generate 1.57 times more return on investment than SPDR Nuveen. However, Xtrackers Municipal is 1.57 times more volatile than SPDR Nuveen Bloomberg. It trades about 0.04 of its potential returns per unit of risk. SPDR Nuveen Bloomberg is currently generating about 0.05 per unit of risk. If you would invest 2,417 in Xtrackers Municipal Infrastructure on August 31, 2024 and sell it today you would earn a total of 181.00 from holding Xtrackers Municipal Infrastructure or generate 7.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Xtrackers Municipal Infrastruc vs. SPDR Nuveen Bloomberg
Performance |
| Timeline |
| Xtrackers Municipal |
| SPDR Nuveen Bloomberg |
Xtrackers Municipal and SPDR Nuveen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers Municipal and SPDR Nuveen
The main advantage of trading using opposite Xtrackers Municipal and SPDR Nuveen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Municipal 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 Municipal vs. VanEck Long Muni | Xtrackers Municipal vs. VanEck Short High | Xtrackers Municipal vs. VanEck CEF Municipal | Xtrackers Municipal vs. PIMCO Short Term |
| SPDR Nuveen vs. SPDR Nuveen Bloomberg | SPDR Nuveen vs. Invesco National AMT Free | SPDR Nuveen vs. VanEck Intermediate Muni | SPDR Nuveen vs. iShares National Muni |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Global Correlations Find global opportunities by holding instruments from different markets |