Correlation Between WisdomTree Silver and SSgA SPDR
Can any of the company-specific risk be diversified away by investing in both WisdomTree Silver and SSgA SPDR 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 SSgA SPDR 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 SSgA SPDR Barclays, you can compare the effects of market volatilities on WisdomTree Silver and SSgA SPDR 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 SSgA SPDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Silver and SSgA SPDR.
Diversification Opportunities for WisdomTree Silver and SSgA SPDR
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WisdomTree and SSgA is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Silver 3x and SSgA SPDR Barclays in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSgA SPDR Barclays 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 SSgA SPDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSgA SPDR Barclays has no effect on the direction of WisdomTree Silver i.e., WisdomTree Silver and SSgA SPDR go up and down completely randomly.
Pair Corralation between WisdomTree Silver and SSgA SPDR
Assuming the 90 days trading horizon WisdomTree Silver 3x is expected to under-perform the SSgA SPDR. In addition to that, WisdomTree Silver is 15.0 times more volatile than SSgA SPDR Barclays. It trades about -0.28 of its total potential returns per unit of risk. SSgA SPDR Barclays is currently generating about 0.12 per unit of volatility. If you would invest 4,341 in SSgA SPDR Barclays on August 31, 2024 and sell it today you would earn a total of 38.00 from holding SSgA SPDR Barclays or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
WisdomTree Silver 3x vs. SSgA SPDR Barclays
Performance |
| Timeline |
| WisdomTree Silver |
| SSgA SPDR Barclays |
WisdomTree Silver and SSgA SPDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Silver and SSgA SPDR
The main advantage of trading using opposite WisdomTree Silver and SSgA SPDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Silver position performs unexpectedly, SSgA SPDR 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 SSgA SPDR will offset losses from the drop in SSgA SPDR's long position.| WisdomTree Silver vs. GraniteShares 3x Short | WisdomTree Silver vs. WisdomTree Natural Gas | WisdomTree Silver vs. Leverage Shares 3x | WisdomTree Silver vs. WisdomTree Natural Gas |
| SSgA SPDR vs. WisdomTree Natural Gas | SSgA SPDR vs. WisdomTree Natural Gas | SSgA SPDR vs. Leverage Shares 2x | SSgA SPDR vs. WisdomTree Silver 3x |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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