Correlation Between WisdomTree Emerging and CYB
Can any of the company-specific risk be diversified away by investing in both WisdomTree Emerging and CYB 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 Emerging and CYB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Emerging Currency and CYB, you can compare the effects of market volatilities on WisdomTree Emerging and CYB 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 Emerging with a short position of CYB. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Emerging and CYB.
Diversification Opportunities for WisdomTree Emerging and CYB
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between WisdomTree and CYB is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Emerging Currency and CYB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CYB and WisdomTree Emerging 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 Emerging Currency are associated (or correlated) with CYB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CYB has no effect on the direction of WisdomTree Emerging i.e., WisdomTree Emerging and CYB go up and down completely randomly.
Pair Corralation between WisdomTree Emerging and CYB
If you would invest 2,436 in CYB on August 28, 2024 and sell it today you would earn a total of 0.00 from holding CYB or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
WisdomTree Emerging Currency vs. CYB
Performance |
| Timeline |
| WisdomTree Emerging |
| CYB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
WisdomTree Emerging and CYB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Emerging and CYB
The main advantage of trading using opposite WisdomTree Emerging and CYB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Emerging position performs unexpectedly, CYB 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 CYB will offset losses from the drop in CYB's long position.| WisdomTree Emerging vs. Invesco Emerging Markets | WisdomTree Emerging vs. PIMCO 15 Year | WisdomTree Emerging vs. iShares JP Morgan |
| CYB vs. Invesco CurrencyShares Australian | CYB vs. WisdomTree Emerging Currency | CYB vs. Invesco CurrencyShares Swiss | CYB vs. Invesco CurrencyShares Canadian |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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