Correlation Between X Square and SPDR Nuveen

Can any of the company-specific risk be diversified away by investing in both X Square and SPDR Nuveen 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 X Square and SPDR Nuveen into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between X Square Balanced and SPDR Nuveen Municipal, you can compare the effects of market volatilities on X Square and SPDR Nuveen 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 X Square with a short position of SPDR Nuveen. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Square and SPDR Nuveen.

Diversification Opportunities for X Square and SPDR Nuveen

0.0

Correlation Coefficient

X Square  SPDR Nuveen

Pay attention - limited upside

The 3 months correlation between SQBIX and SPDR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding X Square Balanced and SPDR Nuveen Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Nuveen Municipal and X Square 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 X Square Balanced are associated (or correlated) with SPDR Nuveen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Nuveen Municipal has no effect on the direction of X Square i.e., X Square and SPDR Nuveen go up and down completely randomly.

Pair Corralation between X Square and SPDR Nuveen

If you would invest  2,758  in SPDR Nuveen Municipal on September 3, 2024 and sell it today you would earn a total of  34.00  from holding SPDR Nuveen Municipal or generate 1.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

X Square Balanced  vs.  SPDR Nuveen Municipal

X Square Balanced

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days X Square Balanced has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, X Square is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SPDR Nuveen Municipal

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Nuveen Municipal are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, SPDR Nuveen is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with X Square and SPDR Nuveen

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

The idea behind X Square Balanced and SPDR Nuveen Municipal 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.