Correlation Between WisdomTree Cocoa and GraniteShares
Can any of the company-specific risk be diversified away by investing in both WisdomTree Cocoa and GraniteShares 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 Cocoa and GraniteShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Cocoa and GraniteShares 3x Short, you can compare the effects of market volatilities on WisdomTree Cocoa and GraniteShares 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 Cocoa with a short position of GraniteShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Cocoa and GraniteShares.
Diversification Opportunities for WisdomTree Cocoa and GraniteShares
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WisdomTree and GraniteShares is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Cocoa and GraniteShares 3x Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares 3x Short and WisdomTree Cocoa 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 Cocoa are associated (or correlated) with GraniteShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares 3x Short has no effect on the direction of WisdomTree Cocoa i.e., WisdomTree Cocoa and GraniteShares go up and down completely randomly.
Pair Corralation between WisdomTree Cocoa and GraniteShares
Assuming the 90 days trading horizon WisdomTree Cocoa is expected to generate 0.66 times more return on investment than GraniteShares. However, WisdomTree Cocoa is 1.52 times less risky than GraniteShares. It trades about 0.21 of its potential returns per unit of risk. GraniteShares 3x Short is currently generating about -0.15 per unit of risk. If you would invest 1,219 in WisdomTree Cocoa on January 28, 2025 and sell it today you would earn a total of 234.00 from holding WisdomTree Cocoa or generate 19.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Cocoa vs. GraniteShares 3x Short
Performance |
| Timeline |
| WisdomTree Cocoa |
| GraniteShares 3x Short |
WisdomTree Cocoa and GraniteShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Cocoa and GraniteShares
The main advantage of trading using opposite WisdomTree Cocoa and GraniteShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Cocoa position performs unexpectedly, GraniteShares 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 GraniteShares will offset losses from the drop in GraniteShares' long position.| WisdomTree Cocoa vs. WisdomTree Zinc | WisdomTree Cocoa vs. WisdomTree Brent Crude | WisdomTree Cocoa vs. WisdomTree Aluminium 2x | WisdomTree Cocoa vs. WisdomTree Enhanced Commodity |
| GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Short |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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