Correlation Between WisdomTree Europe and Martin Currie
Can any of the company-specific risk be diversified away by investing in both WisdomTree Europe and Martin Currie 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 Europe and Martin Currie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Europe Hedged and Martin Currie Sustainable, you can compare the effects of market volatilities on WisdomTree Europe and Martin Currie 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 Europe with a short position of Martin Currie. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Europe and Martin Currie.
Diversification Opportunities for WisdomTree Europe and Martin Currie
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WisdomTree and Martin is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Europe Hedged and Martin Currie Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martin Currie Sustainable and WisdomTree Europe 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 Europe Hedged are associated (or correlated) with Martin Currie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martin Currie Sustainable has no effect on the direction of WisdomTree Europe i.e., WisdomTree Europe and Martin Currie go up and down completely randomly.
Pair Corralation between WisdomTree Europe and Martin Currie
Given the investment horizon of 90 days WisdomTree Europe Hedged is expected to generate 0.69 times more return on investment than Martin Currie. However, WisdomTree Europe Hedged is 1.44 times less risky than Martin Currie. It trades about -0.05 of its potential returns per unit of risk. Martin Currie Sustainable is currently generating about -0.14 per unit of risk. If you would invest 3,880 in WisdomTree Europe Hedged on September 19, 2024 and sell it today you would lose (59.00) from holding WisdomTree Europe Hedged or give up 1.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
WisdomTree Europe Hedged vs. Martin Currie Sustainable
Performance |
| Timeline |
| WisdomTree Europe Hedged |
| Martin Currie Sustainable |
WisdomTree Europe and Martin Currie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Europe and Martin Currie
The main advantage of trading using opposite WisdomTree Europe and Martin Currie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Europe position performs unexpectedly, Martin Currie 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 Martin Currie will offset losses from the drop in Martin Currie's long position.| WisdomTree Europe vs. iShares MSCI France | WisdomTree Europe vs. iShares MSCI United | WisdomTree Europe vs. iShares MSCI Spain | WisdomTree Europe vs. iShares MSCI Netherlands |
| Martin Currie vs. WisdomTree International Quality | Martin Currie vs. WisdomTree Europe Hedged | Martin Currie vs. iShares Currency Hedged | Martin Currie vs. WisdomTree Europe Quality |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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