Correlation Between WisdomTree and SPDR Barclays
Can any of the company-specific risk be diversified away by investing in both WisdomTree and SPDR Barclays 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 SPDR Barclays 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 SPDR Barclays 10, you can compare the effects of market volatilities on WisdomTree and SPDR Barclays 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 SPDR Barclays. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree and SPDR Barclays.
Diversification Opportunities for WisdomTree and SPDR Barclays
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WisdomTree and SPDR is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree SP 500 and SPDR Barclays 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Barclays 10 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 SPDR Barclays. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Barclays 10 has no effect on the direction of WisdomTree i.e., WisdomTree and SPDR Barclays go up and down completely randomly.
Pair Corralation between WisdomTree and SPDR Barclays
Assuming the 90 days trading horizon WisdomTree SP 500 is expected to under-perform the SPDR Barclays. In addition to that, WisdomTree is 3.41 times more volatile than SPDR Barclays 10. It trades about -0.07 of its total potential returns per unit of risk. SPDR Barclays 10 is currently generating about 0.03 per unit of volatility. If you would invest 2,559 in SPDR Barclays 10 on November 8, 2024 and sell it today you would earn a total of 95.00 from holding SPDR Barclays 10 or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 81.2% |
| Values | Daily Returns |
WisdomTree SP 500 vs. SPDR Barclays 10
Performance |
| Timeline |
| WisdomTree SP 500 |
| SPDR Barclays 10 |
WisdomTree and SPDR Barclays Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree and SPDR Barclays
The main advantage of trading using opposite WisdomTree and SPDR Barclays positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree position performs unexpectedly, SPDR Barclays 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 SPDR Barclays will offset losses from the drop in SPDR Barclays' long position.| WisdomTree vs. WisdomTree Zinc | WisdomTree vs. WisdomTree Brent Crude | WisdomTree vs. WisdomTree Aluminium 2x | WisdomTree vs. WisdomTree Enhanced Commodity |
| SPDR Barclays vs. SPDR Dow Jones | SPDR Barclays vs. SPDR SP Dividend | SPDR Barclays vs. SPDR Barclays Euro | SPDR Barclays vs. SPDR SP Consumer |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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