Correlation Between WisdomTree Silver and KraneShares Electric
Can any of the company-specific risk be diversified away by investing in both WisdomTree Silver and KraneShares Electric 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 KraneShares Electric 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 KraneShares Electric Vehicles, you can compare the effects of market volatilities on WisdomTree Silver and KraneShares Electric 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 KraneShares Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Silver and KraneShares Electric.
Diversification Opportunities for WisdomTree Silver and KraneShares Electric
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WisdomTree and KraneShares is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Silver 3x and KraneShares Electric Vehicles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KraneShares Electric 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 KraneShares Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KraneShares Electric has no effect on the direction of WisdomTree Silver i.e., WisdomTree Silver and KraneShares Electric go up and down completely randomly.
Pair Corralation between WisdomTree Silver and KraneShares Electric
Assuming the 90 days trading horizon WisdomTree Silver 3x is expected to under-perform the KraneShares Electric. In addition to that, WisdomTree Silver is 2.12 times more volatile than KraneShares Electric Vehicles. It trades about -0.32 of its total potential returns per unit of risk. KraneShares Electric Vehicles is currently generating about -0.03 per unit of volatility. If you would invest 1,649 in KraneShares Electric Vehicles on August 30, 2024 and sell it today you would lose (36.00) from holding KraneShares Electric Vehicles or give up 2.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Silver 3x vs. KraneShares Electric Vehicles
Performance |
| Timeline |
| WisdomTree Silver |
| KraneShares Electric |
WisdomTree Silver and KraneShares Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Silver and KraneShares Electric
The main advantage of trading using opposite WisdomTree Silver and KraneShares Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Silver position performs unexpectedly, KraneShares Electric 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 KraneShares Electric will offset losses from the drop in KraneShares Electric'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 |
| KraneShares Electric vs. Leverage Shares 3x | KraneShares Electric vs. GraniteShares 3x Short | KraneShares Electric vs. WisdomTree Natural Gas | KraneShares Electric 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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