Correlation Between Global X and Xtrackers California
Can any of the company-specific risk be diversified away by investing in both Global X 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 Global X and Xtrackers California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Funds and Xtrackers California Municipal, you can compare the effects of market volatilities on Global X 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 Global X with a short position of Xtrackers California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Xtrackers California.
Diversification Opportunities for Global X and Xtrackers California
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Xtrackers is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and Xtrackers California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers California and Global X 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 Global X Funds 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 Global X i.e., Global X and Xtrackers California go up and down completely randomly.
Pair Corralation between Global X and Xtrackers California
Given the investment horizon of 90 days Global X Funds is expected to generate 3.98 times more return on investment than Xtrackers California. However, Global X is 3.98 times more volatile than Xtrackers California Municipal. It trades about 0.15 of its potential returns per unit of risk. Xtrackers California Municipal is currently generating about 0.03 per unit of risk. If you would invest 2,454 in Global X Funds on October 25, 2024 and sell it today you would earn a total of 1,568 from holding Global X Funds or generate 63.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.99% |
| Values | Daily Returns |
Global X Funds vs. Xtrackers California Municipal
Performance |
| Timeline |
| Global X Funds |
| Xtrackers California |
Global X and Xtrackers California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Xtrackers California
The main advantage of trading using opposite Global X and Xtrackers California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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.| Global X vs. First Trust Exchange Traded | Global X vs. Ultimus Managers Trust | Global X vs. Horizon Kinetics Medical | Global X vs. Harbor Health Care |
| 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 |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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