Correlation Between WisdomTree WTI and Multi Units
Can any of the company-specific risk be diversified away by investing in both WisdomTree WTI and Multi Units 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 WTI and Multi Units into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree WTI Crude and Multi Units France, you can compare the effects of market volatilities on WisdomTree WTI and Multi Units 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 WTI with a short position of Multi Units. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree WTI and Multi Units.
Diversification Opportunities for WisdomTree WTI and Multi Units
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WisdomTree and Multi is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree WTI Crude and Multi Units France in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multi Units France and WisdomTree WTI 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 WTI Crude are associated (or correlated) with Multi Units. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multi Units France has no effect on the direction of WisdomTree WTI i.e., WisdomTree WTI and Multi Units go up and down completely randomly.
Pair Corralation between WisdomTree WTI and Multi Units
Assuming the 90 days trading horizon WisdomTree WTI Crude is expected to under-perform the Multi Units. In addition to that, WisdomTree WTI is 1.61 times more volatile than Multi Units France. It trades about -0.01 of its total potential returns per unit of risk. Multi Units France is currently generating about 0.2 per unit of volatility. If you would invest 158.00 in Multi Units France on November 5, 2024 and sell it today you would earn a total of 5.00 from holding Multi Units France or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree WTI Crude vs. Multi Units France
Performance |
| Timeline |
| WisdomTree WTI Crude |
| Multi Units France |
WisdomTree WTI and Multi Units Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree WTI and Multi Units
The main advantage of trading using opposite WisdomTree WTI and Multi Units positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree WTI position performs unexpectedly, Multi Units 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 Multi Units will offset losses from the drop in Multi Units' long position.| WisdomTree WTI vs. WisdomTree Wheat EUR | WisdomTree WTI vs. WisdomTree Bitcoin EUR | WisdomTree WTI vs. WisdomTree Gold EUR | WisdomTree WTI vs. WisdomTree Cardano EUR |
| Multi Units vs. Lyxor UCITS Stoxx | Multi Units vs. Multi Units France | Multi Units vs. Lyxor MSCI Brazil | Multi Units vs. MULTI UNITS LUXEMBOURG |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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