Correlation Between Xtrackers Municipal and Cabana Target
Can any of the company-specific risk be diversified away by investing in both Xtrackers Municipal and Cabana Target 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 Municipal and Cabana Target into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers Municipal Infrastructure and Cabana Target Drawdown, you can compare the effects of market volatilities on Xtrackers Municipal and Cabana Target 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 Municipal with a short position of Cabana Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Municipal and Cabana Target.
Diversification Opportunities for Xtrackers Municipal and Cabana Target
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xtrackers and Cabana is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Municipal Infrastruc and Cabana Target Drawdown in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabana Target Drawdown and Xtrackers Municipal 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 Municipal Infrastructure are associated (or correlated) with Cabana Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabana Target Drawdown has no effect on the direction of Xtrackers Municipal i.e., Xtrackers Municipal and Cabana Target go up and down completely randomly.
Pair Corralation between Xtrackers Municipal and Cabana Target
Given the investment horizon of 90 days Xtrackers Municipal Infrastructure is expected to generate 0.66 times more return on investment than Cabana Target. However, Xtrackers Municipal Infrastructure is 1.52 times less risky than Cabana Target. It trades about 0.27 of its potential returns per unit of risk. Cabana Target Drawdown is currently generating about 0.03 per unit of risk. If you would invest 2,341 in Xtrackers Municipal Infrastructure on August 25, 2025 and sell it today you would earn a total of 144.00 from holding Xtrackers Municipal Infrastructure or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers Municipal Infrastruc vs. Cabana Target Drawdown
Performance |
| Timeline |
| Xtrackers Municipal |
| Cabana Target Drawdown |
Xtrackers Municipal and Cabana Target Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers Municipal and Cabana Target
The main advantage of trading using opposite Xtrackers Municipal and Cabana Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Municipal position performs unexpectedly, Cabana Target 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 Cabana Target will offset losses from the drop in Cabana Target's long position.| Xtrackers Municipal vs. Invesco New York | Xtrackers Municipal vs. Global X SuperIncome | Xtrackers Municipal vs. BlackRock Intermediate Muni | Xtrackers Municipal vs. Invesco BulletShares 2031 |
| Cabana Target vs. VanEck Low Carbon | Cabana Target vs. Inspire Global Hope | Cabana Target vs. AB High Dividend | Cabana Target vs. First Trust RiverFront |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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