Correlation Between WisdomTree Natural and SPDR Barclays
Can any of the company-specific risk be diversified away by investing in both WisdomTree Natural and SPDR Barclays 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 Natural and SPDR Barclays into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Natural Gas and SPDR Barclays 10, you can compare the effects of market volatilities on WisdomTree Natural and SPDR Barclays 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 Natural with a short position of SPDR Barclays. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Natural and SPDR Barclays.
Diversification Opportunities for WisdomTree Natural and SPDR Barclays
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WisdomTree and SPDR is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Natural Gas and SPDR Barclays 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Barclays 10 and WisdomTree Natural 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 Natural Gas are associated (or correlated) with SPDR Barclays. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Barclays 10 has no effect on the direction of WisdomTree Natural i.e., WisdomTree Natural and SPDR Barclays go up and down completely randomly.
Pair Corralation between WisdomTree Natural and SPDR Barclays
If you would invest 2,556 in SPDR Barclays 10 on November 8, 2024 and sell it today you would earn a total of 146.00 from holding SPDR Barclays 10 or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.0% |
| Values | Daily Returns |
WisdomTree Natural Gas vs. SPDR Barclays 10
Performance |
| Timeline |
| WisdomTree Natural Gas |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SPDR Barclays 10 |
WisdomTree Natural and SPDR Barclays Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Natural and SPDR Barclays
The main advantage of trading using opposite WisdomTree Natural and SPDR Barclays positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Natural position performs unexpectedly, SPDR Barclays 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 Barclays will offset losses from the drop in SPDR Barclays' long position.| WisdomTree Natural vs. WisdomTree Zinc | WisdomTree Natural vs. WisdomTree Brent Crude | WisdomTree Natural vs. WisdomTree Aluminium 2x | WisdomTree Natural vs. WisdomTree Enhanced Commodity |
| SPDR Barclays vs. SPDR Dow Jones | SPDR Barclays vs. SPDR SP Consumer | SPDR Barclays vs. SPDR Morningstar Multi Asset |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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