Correlation Between WisdomTree Continuous and Cambria Shareholder
Can any of the company-specific risk be diversified away by investing in both WisdomTree Continuous and Cambria Shareholder 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 Continuous and Cambria Shareholder into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Continuous Commodity and Cambria Shareholder Yield, you can compare the effects of market volatilities on WisdomTree Continuous and Cambria Shareholder 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 Continuous with a short position of Cambria Shareholder. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Continuous and Cambria Shareholder.
Diversification Opportunities for WisdomTree Continuous and Cambria Shareholder
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WisdomTree and Cambria is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Continuous Commodit and Cambria Shareholder Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Shareholder Yield and WisdomTree Continuous 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 Continuous Commodity are associated (or correlated) with Cambria Shareholder. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Shareholder Yield has no effect on the direction of WisdomTree Continuous i.e., WisdomTree Continuous and Cambria Shareholder go up and down completely randomly.
Pair Corralation between WisdomTree Continuous and Cambria Shareholder
Considering the 90-day investment horizon WisdomTree Continuous is expected to generate 10.75 times less return on investment than Cambria Shareholder. But when comparing it to its historical volatility, WisdomTree Continuous Commodity is 1.45 times less risky than Cambria Shareholder. It trades about 0.04 of its potential returns per unit of risk. Cambria Shareholder Yield is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 7,016 in Cambria Shareholder Yield on September 4, 2024 and sell it today you would earn a total of 541.00 from holding Cambria Shareholder Yield or generate 7.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Continuous Commodit vs. Cambria Shareholder Yield
Performance |
| Timeline |
| WisdomTree Continuous |
| Cambria Shareholder Yield |
WisdomTree Continuous and Cambria Shareholder Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Continuous and Cambria Shareholder
The main advantage of trading using opposite WisdomTree Continuous and Cambria Shareholder positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Continuous position performs unexpectedly, Cambria Shareholder 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 Cambria Shareholder will offset losses from the drop in Cambria Shareholder's long position.| WisdomTree Continuous vs. iPath Bloomberg Commodity | WisdomTree Continuous vs. iShares SP GSCI | WisdomTree Continuous vs. Invesco DB Precious |
| Cambria Shareholder vs. Vanguard Mid Cap Value | Cambria Shareholder vs. SPDR SP Dividend | Cambria Shareholder vs. SCOR PK | Cambria Shareholder vs. HUMANA INC |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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