Correlation Between AltShares Trust and WisdomTree Managed
Can any of the company-specific risk be diversified away by investing in both AltShares Trust and WisdomTree Managed 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 AltShares Trust and WisdomTree Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AltShares Trust and WisdomTree Managed Futures, you can compare the effects of market volatilities on AltShares Trust and WisdomTree Managed 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 AltShares Trust with a short position of WisdomTree Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of AltShares Trust and WisdomTree Managed.
Diversification Opportunities for AltShares Trust and WisdomTree Managed
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AltShares and WisdomTree is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding AltShares Trust and WisdomTree Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Managed and AltShares Trust 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 AltShares Trust are associated (or correlated) with WisdomTree Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Managed has no effect on the direction of AltShares Trust i.e., AltShares Trust and WisdomTree Managed go up and down completely randomly.
Pair Corralation between AltShares Trust and WisdomTree Managed
Considering the 90-day investment horizon AltShares Trust is expected to under-perform the WisdomTree Managed. But the etf apears to be less risky and, when comparing its historical volatility, AltShares Trust is 4.87 times less risky than WisdomTree Managed. The etf trades about -0.02 of its potential returns per unit of risk. The WisdomTree Managed Futures is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,538 in WisdomTree Managed Futures on August 30, 2024 and sell it today you would earn a total of 45.00 from holding WisdomTree Managed Futures or generate 1.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
AltShares Trust vs. WisdomTree Managed Futures
Performance |
| Timeline |
| AltShares Trust |
| WisdomTree Managed |
AltShares Trust and WisdomTree Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AltShares Trust and WisdomTree Managed
The main advantage of trading using opposite AltShares Trust and WisdomTree Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AltShares Trust position performs unexpectedly, WisdomTree Managed 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 Managed will offset losses from the drop in WisdomTree Managed's long position.| AltShares Trust vs. Albany International | AltShares Trust vs. Acadia Realty Trust | AltShares Trust vs. AptarGroup | AltShares Trust vs. Applied Industrial Technologies |
| WisdomTree Managed vs. First Trust Managed | WisdomTree Managed vs. iMGP DBi Managed | WisdomTree Managed vs. First Trust LongShort | WisdomTree Managed vs. WisdomTree CBOE SP |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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