Correlation Between US Global and WisdomTree
Can any of the company-specific risk be diversified away by investing in both US Global and WisdomTree 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 US Global and WisdomTree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Global Investors and WisdomTree, you can compare the effects of market volatilities on US Global and WisdomTree 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 US Global with a short position of WisdomTree. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Global and WisdomTree.
Diversification Opportunities for US Global and WisdomTree
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GROW and WisdomTree is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding US Global Investors and WisdomTree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree and US Global 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 US Global Investors are associated (or correlated) with WisdomTree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree has no effect on the direction of US Global i.e., US Global and WisdomTree go up and down completely randomly.
Pair Corralation between US Global and WisdomTree
Given the investment horizon of 90 days US Global is expected to generate 1.71 times less return on investment than WisdomTree. But when comparing it to its historical volatility, US Global Investors is 1.05 times less risky than WisdomTree. It trades about 0.05 of its potential returns per unit of risk. WisdomTree is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 962.00 in WisdomTree on November 18, 2024 and sell it today you would earn a total of 14.00 from holding WisdomTree or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Global Investors vs. WisdomTree
Performance |
| Timeline |
| US Global Investors |
| WisdomTree |
US Global and WisdomTree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Global and WisdomTree
The main advantage of trading using opposite US Global and WisdomTree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Global position performs unexpectedly, WisdomTree 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 will offset losses from the drop in WisdomTree's long position.| US Global vs. Gladstone Investment | US Global vs. PennantPark Floating Rate | US Global vs. Horizon Technology Finance | US Global vs. Stellus Capital Investment |
| WisdomTree vs. Horizon Space Acquisition | WisdomTree vs. Erayak Power Solution | WisdomTree vs. AlphaTime Acquisition Corp | WisdomTree vs. Israel Acquisitions Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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