Correlation Between WisdomTree and LS 1x
Can any of the company-specific risk be diversified away by investing in both WisdomTree and LS 1x 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 and LS 1x into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree SP 500 and LS 1x Coinbase, you can compare the effects of market volatilities on WisdomTree and LS 1x 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 with a short position of LS 1x. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree and LS 1x.
Diversification Opportunities for WisdomTree and LS 1x
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WisdomTree and COI1 is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree SP 500 and LS 1x Coinbase in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LS 1x Coinbase and WisdomTree 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 SP 500 are associated (or correlated) with LS 1x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LS 1x Coinbase has no effect on the direction of WisdomTree i.e., WisdomTree and LS 1x go up and down completely randomly.
Pair Corralation between WisdomTree and LS 1x
Assuming the 90 days trading horizon WisdomTree SP 500 is expected to under-perform the LS 1x. But the etf apears to be less risky and, when comparing its historical volatility, WisdomTree SP 500 is 2.21 times less risky than LS 1x. The etf trades about -0.1 of its potential returns per unit of risk. The LS 1x Coinbase is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 67.00 in LS 1x Coinbase on September 14, 2024 and sell it today you would earn a total of 587.00 from holding LS 1x Coinbase or generate 876.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree SP 500 vs. LS 1x Coinbase
Performance |
| Timeline |
| WisdomTree SP 500 |
| LS 1x Coinbase |
WisdomTree and LS 1x Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree and LS 1x
The main advantage of trading using opposite WisdomTree and LS 1x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree position performs unexpectedly, LS 1x 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 LS 1x will offset losses from the drop in LS 1x's long position.| WisdomTree vs. WisdomTree Zinc | WisdomTree vs. WisdomTree Brent Crude | WisdomTree vs. WisdomTree Aluminium 2x | WisdomTree vs. WisdomTree Enhanced Commodity |
| LS 1x vs. iShares MSCI Japan | LS 1x vs. Amundi EUR High | LS 1x vs. iShares JP Morgan | LS 1x vs. Xtrackers MSCI |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |