Correlation Between WisdomTree International and USCF ETF
Can any of the company-specific risk be diversified away by investing in both WisdomTree International and USCF ETF 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 International and USCF ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree International Al and USCF ETF Trust, you can compare the effects of market volatilities on WisdomTree International and USCF ETF 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 International with a short position of USCF ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree International and USCF ETF.
Diversification Opportunities for WisdomTree International and USCF ETF
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WisdomTree and USCF is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree International Al and USCF ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USCF ETF Trust and WisdomTree International 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 International Al are associated (or correlated) with USCF ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USCF ETF Trust has no effect on the direction of WisdomTree International i.e., WisdomTree International and USCF ETF go up and down completely randomly.
Pair Corralation between WisdomTree International and USCF ETF
Given the investment horizon of 90 days WisdomTree International is expected to generate 2.88 times less return on investment than USCF ETF. In addition to that, WisdomTree International is 1.05 times more volatile than USCF ETF Trust. It trades about 0.04 of its total potential returns per unit of risk. USCF ETF Trust is currently generating about 0.12 per unit of volatility. If you would invest 2,578 in USCF ETF Trust on November 28, 2024 and sell it today you would earn a total of 433.00 from holding USCF ETF Trust or generate 16.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree International Al vs. USCF ETF Trust
Performance |
| Timeline |
| WisdomTree International |
| USCF ETF Trust |
WisdomTree International and USCF ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree International and USCF ETF
The main advantage of trading using opposite WisdomTree International and USCF ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree International position performs unexpectedly, USCF ETF 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 USCF ETF will offset losses from the drop in USCF ETF's long position.| WisdomTree International vs. WisdomTree Trust | WisdomTree International vs. IQ Global Equity | WisdomTree International vs. WisdomTree Trust | WisdomTree International vs. WisdomTree International High |
| USCF ETF vs. Strategy Shares | USCF ETF vs. Freedom Day Dividend | USCF ETF vs. Franklin Templeton ETF | USCF ETF vs. iShares MSCI China |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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