Correlation Between Cosan SA and WisdomTree Emerging
Can any of the company-specific risk be diversified away by investing in both Cosan SA and WisdomTree Emerging 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 Cosan SA and WisdomTree Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cosan SA ADR and WisdomTree Emerging Markets, you can compare the effects of market volatilities on Cosan SA and WisdomTree Emerging 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 Cosan SA with a short position of WisdomTree Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cosan SA and WisdomTree Emerging.
Diversification Opportunities for Cosan SA and WisdomTree Emerging
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cosan and WisdomTree is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Cosan SA ADR and WisdomTree Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Emerging and Cosan SA 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 Cosan SA ADR are associated (or correlated) with WisdomTree Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Emerging has no effect on the direction of Cosan SA i.e., Cosan SA and WisdomTree Emerging go up and down completely randomly.
Pair Corralation between Cosan SA and WisdomTree Emerging
Given the investment horizon of 90 days Cosan SA ADR is expected to generate 4.38 times more return on investment than WisdomTree Emerging. However, Cosan SA is 4.38 times more volatile than WisdomTree Emerging Markets. It trades about 0.05 of its potential returns per unit of risk. WisdomTree Emerging Markets is currently generating about 0.14 per unit of risk. If you would invest 455.00 in Cosan SA ADR on November 20, 2025 and sell it today you would earn a total of 33.00 from holding Cosan SA ADR or generate 7.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Cosan SA ADR vs. WisdomTree Emerging Markets
Performance |
| Timeline |
| Cosan SA ADR |
| WisdomTree Emerging |
Cosan SA and WisdomTree Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cosan SA and WisdomTree Emerging
The main advantage of trading using opposite Cosan SA and WisdomTree Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosan SA position performs unexpectedly, WisdomTree Emerging 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 Emerging will offset losses from the drop in WisdomTree Emerging's long position.| Cosan SA vs. Delek Energy | Cosan SA vs. Par Pacific Holdings | Cosan SA vs. Torm PLC Class | Cosan SA vs. Northern Oil Gas |
| WisdomTree Emerging vs. iShares MSCI USA | WisdomTree Emerging vs. Invesco EQQQ NASDAQ 100 | WisdomTree Emerging vs. iShares VII PLC | WisdomTree Emerging vs. iShares MSCI North |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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