Correlation Between WisdomTree Investments and Thyssenkrupp
Can any of the company-specific risk be diversified away by investing in both WisdomTree Investments and Thyssenkrupp 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 Thyssenkrupp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Investments and thyssenkrupp AG, you can compare the effects of market volatilities on WisdomTree Investments and Thyssenkrupp 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 Thyssenkrupp. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Investments and Thyssenkrupp.
Diversification Opportunities for WisdomTree Investments and Thyssenkrupp
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WisdomTree and Thyssenkrupp is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Investments and thyssenkrupp AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on thyssenkrupp AG 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 Thyssenkrupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of thyssenkrupp AG has no effect on the direction of WisdomTree Investments i.e., WisdomTree Investments and Thyssenkrupp go up and down completely randomly.
Pair Corralation between WisdomTree Investments and Thyssenkrupp
Assuming the 90 days horizon WisdomTree Investments is expected to generate 2.5 times less return on investment than Thyssenkrupp. In addition to that, WisdomTree Investments is 1.3 times more volatile than thyssenkrupp AG. It trades about 0.11 of its total potential returns per unit of risk. thyssenkrupp AG is currently generating about 0.36 per unit of volatility. If you would invest 334.00 in thyssenkrupp AG on September 12, 2024 and sell it today you would earn a total of 76.00 from holding thyssenkrupp AG or generate 22.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
WisdomTree Investments vs. thyssenkrupp AG
Performance |
| Timeline |
| WisdomTree Investments |
| thyssenkrupp AG |
WisdomTree Investments and Thyssenkrupp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Investments and Thyssenkrupp
The main advantage of trading using opposite WisdomTree Investments and Thyssenkrupp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Investments position performs unexpectedly, Thyssenkrupp 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 Thyssenkrupp will offset losses from the drop in Thyssenkrupp's long position.| WisdomTree Investments vs. Ameriprise Financial | WisdomTree Investments vs. Ares Management Corp | WisdomTree Investments vs. Superior Plus Corp | WisdomTree Investments vs. SIVERS SEMICONDUCTORS AB |
| Thyssenkrupp vs. VIRG NATL BANKSH | Thyssenkrupp vs. WisdomTree Investments | Thyssenkrupp vs. JSC Halyk bank | Thyssenkrupp vs. CDN IMPERIAL BANK |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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