Correlation Between WisdomTree Emerging and ProShares
Can any of the company-specific risk be diversified away by investing in both WisdomTree Emerging and ProShares 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 ProShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Emerging Markets and ProShares SP MidCap, you can compare the effects of market volatilities on WisdomTree Emerging and ProShares 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 ProShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Emerging and ProShares.
Diversification Opportunities for WisdomTree Emerging and ProShares
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WisdomTree and ProShares is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Emerging Markets and ProShares SP MidCap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares SP MidCap 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 Markets are associated (or correlated) with ProShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares SP MidCap has no effect on the direction of WisdomTree Emerging i.e., WisdomTree Emerging and ProShares go up and down completely randomly.
Pair Corralation between WisdomTree Emerging and ProShares
Given the investment horizon of 90 days WisdomTree Emerging Markets is expected to under-perform the ProShares. In addition to that, WisdomTree Emerging is 1.07 times more volatile than ProShares SP MidCap. It trades about -0.07 of its total potential returns per unit of risk. ProShares SP MidCap is currently generating about 0.19 per unit of volatility. If you would invest 7,962 in ProShares SP MidCap on August 28, 2024 and sell it today you would earn a total of 917.00 from holding ProShares SP MidCap or generate 11.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Emerging Markets vs. ProShares SP MidCap
Performance |
| Timeline |
| WisdomTree Emerging |
| ProShares SP MidCap |
WisdomTree Emerging and ProShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Emerging and ProShares
The main advantage of trading using opposite WisdomTree Emerging and ProShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Emerging position performs unexpectedly, ProShares 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 ProShares will offset losses from the drop in ProShares' long position.| WisdomTree Emerging vs. WisdomTree SmallCap Quality | WisdomTree Emerging vs. WisdomTree Japan Hedged | WisdomTree Emerging vs. WisdomTree Interest Rate | WisdomTree Emerging vs. WisdomTree Emerging Markets |
| ProShares vs. Vanguard Mid Cap Index | ProShares vs. iShares Core SP | ProShares vs. SPDR SP MIDCAP | ProShares vs. First Trust Dorsey |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |