Correlation Between Xtrackers and TCW ETF
Can any of the company-specific risk be diversified away by investing in both Xtrackers and TCW ETF 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 and TCW ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers SP 500 and TCW ETF Trust, you can compare the effects of market volatilities on Xtrackers and TCW ETF 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 with a short position of TCW ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers and TCW ETF.
Diversification Opportunities for Xtrackers and TCW ETF
No risk reduction
The 3 months correlation between Xtrackers and TCW is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers SP 500 and TCW ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TCW ETF Trust and Xtrackers 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 SP 500 are associated (or correlated) with TCW ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TCW ETF Trust has no effect on the direction of Xtrackers i.e., Xtrackers and TCW ETF go up and down completely randomly.
Pair Corralation between Xtrackers and TCW ETF
Given the investment horizon of 90 days Xtrackers is expected to generate 1.18 times less return on investment than TCW ETF. In addition to that, Xtrackers is 1.01 times more volatile than TCW ETF Trust. It trades about 0.13 of its total potential returns per unit of risk. TCW ETF Trust is currently generating about 0.15 per unit of volatility. If you would invest 6,704 in TCW ETF Trust on August 30, 2024 and sell it today you would earn a total of 327.00 from holding TCW ETF Trust or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers SP 500 vs. TCW ETF Trust
Performance |
| Timeline |
| Xtrackers SP 500 |
| TCW ETF Trust |
Xtrackers and TCW ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers and TCW ETF
The main advantage of trading using opposite Xtrackers and TCW ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers position performs unexpectedly, TCW ETF 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 TCW ETF will offset losses from the drop in TCW ETF's long position.| Xtrackers vs. Xtrackers MSCI USA | Xtrackers vs. iShares ESG MSCI | Xtrackers vs. SPDR SP 500 | Xtrackers vs. iShares MSCI USA |
| TCW ETF vs. TCW ETF Trust | TCW ETF vs. SPDR SP 500 | TCW ETF vs. Xtrackers SP 500 | TCW ETF vs. BlackRock Carbon Transition |
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.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |