Correlation Between WisdomTree Silver and IShares Treasury
Can any of the company-specific risk be diversified away by investing in both WisdomTree Silver and IShares Treasury 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 IShares Treasury 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 iShares Treasury Bond, you can compare the effects of market volatilities on WisdomTree Silver and IShares Treasury 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 IShares Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Silver and IShares Treasury.
Diversification Opportunities for WisdomTree Silver and IShares Treasury
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WisdomTree and IShares is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Silver 3x and iShares Treasury Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Treasury Bond 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 IShares Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Treasury Bond has no effect on the direction of WisdomTree Silver i.e., WisdomTree Silver and IShares Treasury go up and down completely randomly.
Pair Corralation between WisdomTree Silver and IShares Treasury
Assuming the 90 days trading horizon WisdomTree Silver 3x is expected to generate 5.29 times more return on investment than IShares Treasury. However, WisdomTree Silver is 5.29 times more volatile than iShares Treasury Bond. It trades about 0.04 of its potential returns per unit of risk. iShares Treasury Bond is currently generating about -0.02 per unit of risk. If you would invest 375,200 in WisdomTree Silver 3x on August 27, 2024 and sell it today you would earn a total of 107,450 from holding WisdomTree Silver 3x or generate 28.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Silver 3x vs. iShares Treasury Bond
Performance |
| Timeline |
| WisdomTree Silver |
| iShares Treasury Bond |
WisdomTree Silver and IShares Treasury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Silver and IShares Treasury
The main advantage of trading using opposite WisdomTree Silver and IShares Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Silver position performs unexpectedly, IShares Treasury 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 IShares Treasury will offset losses from the drop in IShares Treasury's long position.| WisdomTree Silver vs. WisdomTree NASDAQ 100 | WisdomTree Silver vs. WisdomTree SP 500 | WisdomTree Silver vs. Invesco Technology SP | WisdomTree Silver vs. Invesco Technology SP |
| IShares Treasury vs. Leverage Shares 3x | IShares Treasury vs. WisdomTree SP 500 | IShares Treasury vs. WisdomTree Silver 3x | IShares Treasury vs. Leverage Shares 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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