Correlation Between WisdomTree Natural and Amundi MSCI
Can any of the company-specific risk be diversified away by investing in both WisdomTree Natural and Amundi MSCI 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 Natural and Amundi MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Natural Gas and Amundi MSCI China, you can compare the effects of market volatilities on WisdomTree Natural and Amundi MSCI 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 Natural with a short position of Amundi MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Natural and Amundi MSCI.
Diversification Opportunities for WisdomTree Natural and Amundi MSCI
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between WisdomTree and Amundi is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Natural Gas and Amundi MSCI China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi MSCI China and WisdomTree Natural 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 Natural Gas are associated (or correlated) with Amundi MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi MSCI China has no effect on the direction of WisdomTree Natural i.e., WisdomTree Natural and Amundi MSCI go up and down completely randomly.
Pair Corralation between WisdomTree Natural and Amundi MSCI
Assuming the 90 days trading horizon WisdomTree Natural Gas is expected to generate 2.42 times more return on investment than Amundi MSCI. However, WisdomTree Natural is 2.42 times more volatile than Amundi MSCI China. It trades about 0.1 of its potential returns per unit of risk. Amundi MSCI China is currently generating about -0.1 per unit of risk. If you would invest 50,730 in WisdomTree Natural Gas on August 30, 2024 and sell it today you would earn a total of 4,070 from holding WisdomTree Natural Gas or generate 8.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Natural Gas vs. Amundi MSCI China
Performance |
| Timeline |
| WisdomTree Natural Gas |
| Amundi MSCI China |
WisdomTree Natural and Amundi MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Natural and Amundi MSCI
The main advantage of trading using opposite WisdomTree Natural and Amundi MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Natural position performs unexpectedly, Amundi MSCI 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 Amundi MSCI will offset losses from the drop in Amundi MSCI's long position.| WisdomTree Natural vs. WisdomTree NASDAQ 100 | WisdomTree Natural vs. WisdomTree SP 500 | WisdomTree Natural vs. WisdomTree Silver 3x | WisdomTree Natural vs. Invesco Technology SP |
| Amundi MSCI vs. GraniteShares 3x Short | Amundi MSCI vs. WisdomTree Natural Gas | Amundi MSCI vs. Leverage Shares 3x | Amundi MSCI vs. WisdomTree Natural Gas |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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