Correlation Between WisdomTree Investments and Stanley Electric
Can any of the company-specific risk be diversified away by investing in both WisdomTree Investments and Stanley Electric 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 WisdomTree Investments and Stanley Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Investments and Stanley Electric Co, you can compare the effects of market volatilities on WisdomTree Investments and Stanley Electric 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 WisdomTree Investments with a short position of Stanley Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Investments and Stanley Electric.
Diversification Opportunities for WisdomTree Investments and Stanley Electric
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WisdomTree and Stanley is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Investments and Stanley Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stanley Electric and WisdomTree Investments 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 WisdomTree Investments are associated (or correlated) with Stanley Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stanley Electric has no effect on the direction of WisdomTree Investments i.e., WisdomTree Investments and Stanley Electric go up and down completely randomly.
Pair Corralation between WisdomTree Investments and Stanley Electric
Assuming the 90 days horizon WisdomTree Investments is expected to generate 2.67 times more return on investment than Stanley Electric. However, WisdomTree Investments is 2.67 times more volatile than Stanley Electric Co. It trades about 0.07 of its potential returns per unit of risk. Stanley Electric Co is currently generating about -0.04 per unit of risk. If you would invest 938.00 in WisdomTree Investments on September 22, 2024 and sell it today you would earn a total of 75.00 from holding WisdomTree Investments or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Investments vs. Stanley Electric Co
Performance |
| Timeline |
| WisdomTree Investments |
| Stanley Electric |
WisdomTree Investments and Stanley Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Investments and Stanley Electric
The main advantage of trading using opposite WisdomTree Investments and Stanley Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Investments position performs unexpectedly, Stanley Electric 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 Stanley Electric will offset losses from the drop in Stanley Electric's long position.| WisdomTree Investments vs. InPlay Oil Corp | WisdomTree Investments vs. Fukuyama Transporting Co | WisdomTree Investments vs. PLAY2CHILL SA ZY | WisdomTree Investments vs. Playtech plc |
| Stanley Electric vs. Micron Technology | Stanley Electric vs. FANDIFI TECHNOLOGY P | Stanley Electric vs. BJs Restaurants | Stanley Electric vs. British American Tobacco |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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