Correlation Between YieldMax MRNA and Xtrackers California
Can any of the company-specific risk be diversified away by investing in both YieldMax MRNA 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 YieldMax MRNA and Xtrackers California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YieldMax MRNA Option and Xtrackers California Municipal, you can compare the effects of market volatilities on YieldMax MRNA 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 YieldMax MRNA with a short position of Xtrackers California. Check out your portfolio center. Please also check ongoing floating volatility patterns of YieldMax MRNA and Xtrackers California.
Diversification Opportunities for YieldMax MRNA and Xtrackers California
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between YieldMax and Xtrackers is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding YieldMax MRNA Option and Xtrackers California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers California and YieldMax MRNA 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 YieldMax MRNA Option 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 YieldMax MRNA i.e., YieldMax MRNA and Xtrackers California go up and down completely randomly.
Pair Corralation between YieldMax MRNA and Xtrackers California
Given the investment horizon of 90 days YieldMax MRNA Option is expected to generate 9.76 times more return on investment than Xtrackers California. However, YieldMax MRNA is 9.76 times more volatile than Xtrackers California Municipal. It trades about 0.07 of its potential returns per unit of risk. Xtrackers California Municipal is currently generating about -0.08 per unit of risk. If you would invest 1,820 in YieldMax MRNA Option on March 7, 2024 and sell it today you would earn a total of 151.00 from holding YieldMax MRNA Option or generate 8.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
YieldMax MRNA Option vs. Xtrackers California Municipal
Performance |
Timeline |
YieldMax MRNA Option |
Xtrackers California |
YieldMax MRNA and Xtrackers California Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with YieldMax MRNA and Xtrackers California
The main advantage of trading using opposite YieldMax MRNA and Xtrackers California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YieldMax MRNA 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.YieldMax MRNA vs. First Trust Emerging | YieldMax MRNA vs. First Trust Managed | YieldMax MRNA vs. First Trust Senior | YieldMax MRNA vs. First Trust Income |
Xtrackers California vs. Vanguard Total Stock | Xtrackers California vs. SPDR SP 500 | Xtrackers California vs. iShares Core SP | Xtrackers California vs. Vanguard Total Bond |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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