Correlation Between WisdomTree Silver and Franklin FTSE
Can any of the company-specific risk be diversified away by investing in both WisdomTree Silver and Franklin FTSE 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 Silver and Franklin FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Silver 3x and Franklin FTSE Asia, you can compare the effects of market volatilities on WisdomTree Silver and Franklin FTSE 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 Silver with a short position of Franklin FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Silver and Franklin FTSE.
Diversification Opportunities for WisdomTree Silver and Franklin FTSE
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WisdomTree and Franklin is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Silver 3x and Franklin FTSE Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin FTSE Asia and WisdomTree Silver 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 Silver 3x are associated (or correlated) with Franklin FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin FTSE Asia has no effect on the direction of WisdomTree Silver i.e., WisdomTree Silver and Franklin FTSE go up and down completely randomly.
Pair Corralation between WisdomTree Silver and Franklin FTSE
Assuming the 90 days trading horizon WisdomTree Silver 3x is expected to generate 6.8 times more return on investment than Franklin FTSE. However, WisdomTree Silver is 6.8 times more volatile than Franklin FTSE Asia. It trades about 0.2 of its potential returns per unit of risk. Franklin FTSE Asia is currently generating about 0.16 per unit of risk. If you would invest 453,200 in WisdomTree Silver 3x on September 13, 2024 and sell it today you would earn a total of 81,100 from holding WisdomTree Silver 3x or generate 17.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Silver 3x vs. Franklin FTSE Asia
Performance |
| Timeline |
| WisdomTree Silver |
| Franklin FTSE Asia |
WisdomTree Silver and Franklin FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Silver and Franklin FTSE
The main advantage of trading using opposite WisdomTree Silver and Franklin FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Silver position performs unexpectedly, Franklin FTSE 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 Franklin FTSE will offset losses from the drop in Franklin FTSE's long position.| WisdomTree Silver vs. WisdomTree Natural Gas | WisdomTree Silver vs. Leverage Shares 3x | WisdomTree Silver vs. GraniteShares 3x Short | WisdomTree Silver vs. WisdomTree Natural Gas |
| Franklin FTSE vs. WisdomTree Natural Gas | Franklin FTSE vs. Leverage Shares 3x | Franklin FTSE vs. GraniteShares 3x Short | Franklin FTSE vs. WisdomTree Natural Gas |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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