Correlation Between BondBloxx ETF and Xtrackers High

Can any of the company-specific risk be diversified away by investing in both BondBloxx ETF and Xtrackers High 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 BondBloxx ETF and Xtrackers High into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BondBloxx ETF Trust and Xtrackers High Beta, you can compare the effects of market volatilities on BondBloxx ETF and Xtrackers High 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 BondBloxx ETF with a short position of Xtrackers High. Check out your portfolio center. Please also check ongoing floating volatility patterns of BondBloxx ETF and Xtrackers High.

Diversification Opportunities for BondBloxx ETF and Xtrackers High

0.74

Correlation Coefficient

BondBloxx ETF  Xtrackers High

Poor diversification

The 3 months correlation between BondBloxx and Xtrackers is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding BondBloxx ETF Trust and Xtrackers High Beta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers High Beta and BondBloxx ETF 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 BondBloxx ETF Trust are associated (or correlated) with Xtrackers High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers High Beta has no effect on the direction of BondBloxx ETF i.e., BondBloxx ETF and Xtrackers High go up and down completely randomly.

Pair Corralation between BondBloxx ETF and Xtrackers High

Given the investment horizon of 90 days BondBloxx ETF Trust is expected to generate 0.81 times more return on investment than Xtrackers High. However, BondBloxx ETF Trust is 1.24 times less risky than Xtrackers High. It trades about -0.01 of its potential returns per unit of risk. Xtrackers High Beta is currently generating about -0.11 per unit of risk. If you would invest  3,383  in BondBloxx ETF Trust on February 1, 2024 and sell it today you would lose (3.00) from holding BondBloxx ETF Trust or give up 0.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

BondBloxx ETF Trust  vs.  Xtrackers High Beta

BondBloxx ETF Trust

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BondBloxx ETF Trust are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, BondBloxx ETF is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Xtrackers High Beta

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xtrackers High Beta has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Xtrackers High is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with BondBloxx ETF and Xtrackers High

The main advantage of trading using opposite BondBloxx ETF and Xtrackers High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BondBloxx ETF position performs unexpectedly, Xtrackers High 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 High will offset losses from the drop in Xtrackers High's long position.

The idea behind BondBloxx ETF Trust and Xtrackers High Beta 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.