Correlation Between Global X and WisdomTree
Can any of the company-specific risk be diversified away by investing in both Global X and WisdomTree 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 Global X and WisdomTree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Clean and WisdomTree SP 500, you can compare the effects of market volatilities on Global X and WisdomTree 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 Global X with a short position of WisdomTree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and WisdomTree.
Diversification Opportunities for Global X and WisdomTree
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Global and WisdomTree is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Global X Clean and WisdomTree SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree SP 500 and Global X 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 Global X Clean are associated (or correlated) with WisdomTree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree SP 500 has no effect on the direction of Global X i.e., Global X and WisdomTree go up and down completely randomly.
Pair Corralation between Global X and WisdomTree
Assuming the 90 days trading horizon Global X Clean is expected to generate 0.42 times more return on investment than WisdomTree. However, Global X Clean is 2.4 times less risky than WisdomTree. It trades about 0.0 of its potential returns per unit of risk. WisdomTree SP 500 is currently generating about -0.04 per unit of risk. If you would invest 2,330 in Global X Clean on September 15, 2024 and sell it today you would earn a total of 0.00 from holding Global X Clean or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Clean vs. WisdomTree SP 500
Performance |
| Timeline |
| Global X Clean |
| WisdomTree SP 500 |
Global X and WisdomTree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and WisdomTree
The main advantage of trading using opposite Global X and WisdomTree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, WisdomTree 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 WisdomTree will offset losses from the drop in WisdomTree's long position.| Global X vs. Global X Data | Global X vs. Global X Copper | Global X vs. Global X ETFs | Global X vs. Global X Infrastructure |
| WisdomTree vs. WisdomTree Zinc | WisdomTree vs. WisdomTree Brent Crude | WisdomTree vs. WisdomTree Aluminium 2x | WisdomTree vs. WisdomTree Enhanced Commodity |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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