Correlation Between WisdomTree Natural and Lyxor UCITS
Can any of the company-specific risk be diversified away by investing in both WisdomTree Natural and Lyxor UCITS 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 Lyxor UCITS 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 Lyxor UCITS iBoxx, you can compare the effects of market volatilities on WisdomTree Natural and Lyxor UCITS 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 Lyxor UCITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Natural and Lyxor UCITS.
Diversification Opportunities for WisdomTree Natural and Lyxor UCITS
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between WisdomTree and Lyxor is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Natural Gas and Lyxor UCITS iBoxx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor UCITS iBoxx 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 Lyxor UCITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor UCITS iBoxx has no effect on the direction of WisdomTree Natural i.e., WisdomTree Natural and Lyxor UCITS go up and down completely randomly.
Pair Corralation between WisdomTree Natural and Lyxor UCITS
Assuming the 90 days trading horizon WisdomTree Natural Gas is expected to under-perform the Lyxor UCITS. In addition to that, WisdomTree Natural is 7.03 times more volatile than Lyxor UCITS iBoxx. It trades about -0.08 of its total potential returns per unit of risk. Lyxor UCITS iBoxx is currently generating about 0.01 per unit of volatility. If you would invest 783,863 in Lyxor UCITS iBoxx on August 31, 2024 and sell it today you would earn a total of 13,237 from holding Lyxor UCITS iBoxx or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.63% |
| Values | Daily Returns |
WisdomTree Natural Gas vs. Lyxor UCITS iBoxx
Performance |
| Timeline |
| WisdomTree Natural Gas |
| Lyxor UCITS iBoxx |
WisdomTree Natural and Lyxor UCITS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Natural and Lyxor UCITS
The main advantage of trading using opposite WisdomTree Natural and Lyxor UCITS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Natural position performs unexpectedly, Lyxor UCITS 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 Lyxor UCITS will offset losses from the drop in Lyxor UCITS'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 |
| Lyxor UCITS vs. Leverage Shares 3x | Lyxor UCITS vs. WisdomTree Natural Gas | Lyxor UCITS vs. GraniteShares 3x Short | Lyxor UCITS vs. Leverage Shares 3x |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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