Correlation Between Xtrackers California and MetLife
Can any of the company-specific risk be diversified away by investing in both Xtrackers California and MetLife 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 California and MetLife into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers California Municipal and MetLife, you can compare the effects of market volatilities on Xtrackers California and MetLife 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 California with a short position of MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers California and MetLife.
Diversification Opportunities for Xtrackers California and MetLife
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Xtrackers and MetLife is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers California Municipal and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife and Xtrackers California 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 California Municipal are associated (or correlated) with MetLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetLife has no effect on the direction of Xtrackers California i.e., Xtrackers California and MetLife go up and down completely randomly.
Pair Corralation between Xtrackers California and MetLife
Allowing for the 90-day total investment horizon Xtrackers California Municipal is expected to generate 0.32 times more return on investment than MetLife. However, Xtrackers California Municipal is 3.13 times less risky than MetLife. It trades about -0.21 of its potential returns per unit of risk. MetLife is currently generating about -0.29 per unit of risk. If you would invest 2,521 in Xtrackers California Municipal on January 18, 2024 and sell it today you would lose (29.00) from holding Xtrackers California Municipal or give up 1.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers California Municipal vs. MetLife
Performance |
| Timeline |
| Xtrackers California |
| MetLife |
Xtrackers California and MetLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers California and MetLife
The main advantage of trading using opposite Xtrackers California and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers California position performs unexpectedly, MetLife 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 MetLife will offset losses from the drop in MetLife's long position.| 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 |
| MetLife vs. Unum Group | MetLife vs. Manulife Financial Corp | MetLife vs. Prudential Financial | MetLife vs. Brighthouse Financial |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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