Correlation Between Manitou BF and WisdomTree Wheat
Can any of the company-specific risk be diversified away by investing in both Manitou BF and WisdomTree Wheat 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 Manitou BF and WisdomTree Wheat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manitou BF SA and WisdomTree Wheat EUR, you can compare the effects of market volatilities on Manitou BF and WisdomTree Wheat 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 Manitou BF with a short position of WisdomTree Wheat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manitou BF and WisdomTree Wheat.
Diversification Opportunities for Manitou BF and WisdomTree Wheat
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Manitou and WisdomTree is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Manitou BF SA and WisdomTree Wheat EUR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Wheat EUR and Manitou BF 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 Manitou BF SA are associated (or correlated) with WisdomTree Wheat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Wheat EUR has no effect on the direction of Manitou BF i.e., Manitou BF and WisdomTree Wheat go up and down completely randomly.
Pair Corralation between Manitou BF and WisdomTree Wheat
Assuming the 90 days trading horizon Manitou BF SA is expected to under-perform the WisdomTree Wheat. In addition to that, Manitou BF is 1.25 times more volatile than WisdomTree Wheat EUR. It trades about -0.28 of its total potential returns per unit of risk. WisdomTree Wheat EUR is currently generating about -0.08 per unit of volatility. If you would invest 2,002 in WisdomTree Wheat EUR on September 3, 2024 and sell it today you would lose (50.00) from holding WisdomTree Wheat EUR or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manitou BF SA vs. WisdomTree Wheat EUR
Performance |
| Timeline |
| Manitou BF SA |
| WisdomTree Wheat EUR |
Manitou BF and WisdomTree Wheat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manitou BF and WisdomTree Wheat
The main advantage of trading using opposite Manitou BF and WisdomTree Wheat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manitou BF position performs unexpectedly, WisdomTree Wheat 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 Wheat will offset losses from the drop in WisdomTree Wheat's long position.| Manitou BF vs. Haulotte Group SA | Manitou BF vs. Trigano SA | Manitou BF vs. Bnteau SA | Manitou BF vs. Derichebourg |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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