Correlation Between WisdomTree Natural and ETC Group
Can any of the company-specific risk be diversified away by investing in both WisdomTree Natural and ETC Group 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 ETC Group 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 ETC Group Global, you can compare the effects of market volatilities on WisdomTree Natural and ETC Group 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 ETC Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Natural and ETC Group.
Diversification Opportunities for WisdomTree Natural and ETC Group
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WisdomTree and ETC is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Natural Gas and ETC Group Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETC Group Global 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 ETC Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETC Group Global has no effect on the direction of WisdomTree Natural i.e., WisdomTree Natural and ETC Group go up and down completely randomly.
Pair Corralation between WisdomTree Natural and ETC Group
Assuming the 90 days trading horizon WisdomTree Natural Gas is expected to generate 5.44 times more return on investment than ETC Group. However, WisdomTree Natural is 5.44 times more volatile than ETC Group Global. It trades about 0.12 of its potential returns per unit of risk. ETC Group Global is currently generating about 0.43 per unit of risk. If you would invest 95,982 in WisdomTree Natural Gas on September 3, 2024 and sell it today you would earn a total of 16,801 from holding WisdomTree Natural Gas or generate 17.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
WisdomTree Natural Gas vs. ETC Group Global
Performance |
| Timeline |
| WisdomTree Natural Gas |
| ETC Group Global |
WisdomTree Natural and ETC Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Natural and ETC Group
The main advantage of trading using opposite WisdomTree Natural and ETC Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Natural position performs unexpectedly, ETC Group 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 ETC Group will offset losses from the drop in ETC Group's long position.| WisdomTree Natural vs. WisdomTree Natural Gas | WisdomTree Natural vs. Leverage Shares 2x | WisdomTree Natural vs. WisdomTree Silver 3x | WisdomTree Natural vs. Leverage Shares 2x |
| ETC Group vs. ETC on CMCI | ETC Group vs. ETC on CMCI | ETC Group vs. ETC on CMCI | ETC Group vs. ETC Group Global |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |