Correlation Between WisdomTree Natural and Global X
Can any of the company-specific risk be diversified away by investing in both WisdomTree Natural and Global X 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 Global X 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 Global X Infrastructure, you can compare the effects of market volatilities on WisdomTree Natural and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Natural and Global X.
Diversification Opportunities for WisdomTree Natural and Global X
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between WisdomTree and Global is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Natural Gas and Global X Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Infrastructure 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Infrastructure has no effect on the direction of WisdomTree Natural i.e., WisdomTree Natural and Global X go up and down completely randomly.
Pair Corralation between WisdomTree Natural and Global X
Assuming the 90 days trading horizon WisdomTree Natural is expected to generate 1.47 times less return on investment than Global X. In addition to that, WisdomTree Natural is 2.26 times more volatile than Global X Infrastructure. It trades about 0.05 of its total potential returns per unit of risk. Global X Infrastructure is currently generating about 0.18 per unit of volatility. If you would invest 3,644 in Global X Infrastructure on September 2, 2024 and sell it today you would earn a total of 587.00 from holding Global X Infrastructure or generate 16.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Natural Gas vs. Global X Infrastructure
Performance |
| Timeline |
| WisdomTree Natural Gas |
| Global X Infrastructure |
WisdomTree Natural and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Natural and Global X
The main advantage of trading using opposite WisdomTree Natural and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Natural position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| WisdomTree Natural vs. Vanguard FTSE Developed | WisdomTree Natural vs. Leverage Shares 2x | WisdomTree Natural vs. Amundi Index Solutions | WisdomTree Natural vs. Amundi Index Solutions |
| Global X vs. Global X Data | Global X vs. Global X Copper | Global X vs. Global X ETFs | Global X vs. Global X Uranium |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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