Correlation Between Xtrackers California and Apple

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Xtrackers California and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on Xtrackers California and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers California and Apple.

Diversification Opportunities for Xtrackers California and Apple

-0.58
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Xtrackers and Apple is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers California Municipal and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Xtrackers California i.e., Xtrackers California and Apple go up and down completely randomly.

Pair Corralation between Xtrackers California and Apple

Allowing for the 90-day total investment horizon Xtrackers California is expected to generate 4.13 times less return on investment than Apple. But when comparing it to its historical volatility, Xtrackers California Municipal is 5.73 times less risky than Apple. It trades about 0.05 of its potential returns per unit of risk. Apple Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  15,744  in Apple Inc on December 20, 2023 and sell it today you would earn a total of  1,628  from holding Apple Inc or generate 10.34% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy26.02%
ValuesDaily Returns

Xtrackers California Municipal  vs.  Apple Inc

 Performance 
       Timeline  
Xtrackers California 

Risk-Adjusted Performance

1 of 100

 
Low
 
High
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Xtrackers California Municipal are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Xtrackers California is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
Apple Inc 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Xtrackers California and Apple Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Xtrackers California and Apple

The main advantage of trading using opposite Xtrackers California and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers California position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.
The idea behind Xtrackers California Municipal and Apple Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

Other Complementary Tools

Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios