Correlation Between WISE KTAM and MTrack Energy
Can any of the company-specific risk be diversified away by investing in both WISE KTAM and MTrack Energy 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 WISE KTAM and MTrack Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WISE KTAM CSI and MTrack Energy ETF, you can compare the effects of market volatilities on WISE KTAM and MTrack Energy 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 WISE KTAM with a short position of MTrack Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of WISE KTAM and MTrack Energy.
Diversification Opportunities for WISE KTAM and MTrack Energy
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between WISE and MTrack is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding WISE KTAM CSI and MTrack Energy ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTrack Energy ETF and WISE KTAM 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 WISE KTAM CSI are associated (or correlated) with MTrack Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTrack Energy ETF has no effect on the direction of WISE KTAM i.e., WISE KTAM and MTrack Energy go up and down completely randomly.
Pair Corralation between WISE KTAM and MTrack Energy
Assuming the 90 days trading horizon WISE KTAM CSI is expected to generate 1.69 times more return on investment than MTrack Energy. However, WISE KTAM is 1.69 times more volatile than MTrack Energy ETF. It trades about 0.01 of its potential returns per unit of risk. MTrack Energy ETF is currently generating about -0.07 per unit of risk. If you would invest 602.00 in WISE KTAM CSI on August 25, 2024 and sell it today you would earn a total of 1.00 from holding WISE KTAM CSI or generate 0.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WISE KTAM CSI vs. MTrack Energy ETF
Performance |
| Timeline |
| WISE KTAM CSI |
| MTrack Energy ETF |
WISE KTAM and MTrack Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WISE KTAM and MTrack Energy
The main advantage of trading using opposite WISE KTAM and MTrack Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WISE KTAM position performs unexpectedly, MTrack Energy 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 MTrack Energy will offset losses from the drop in MTrack Energy's long position.| WISE KTAM vs. United Hero ETF | WISE KTAM vs. BCAP SET100 | WISE KTAM vs. KTAM Gold ETF | WISE KTAM vs. ThaiDEX SET High |
| MTrack Energy vs. United Hero ETF | MTrack Energy vs. BCAP SET100 | MTrack Energy vs. WISE KTAM CSI | MTrack Energy vs. KTAM Gold ETF |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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