Correlation Between WisdomTree NASDAQ and Amundi MSCI
Can any of the company-specific risk be diversified away by investing in both WisdomTree NASDAQ 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 NASDAQ 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 NASDAQ 100 and Amundi MSCI USA, you can compare the effects of market volatilities on WisdomTree NASDAQ 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 NASDAQ with a short position of Amundi MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree NASDAQ and Amundi MSCI.
Diversification Opportunities for WisdomTree NASDAQ and Amundi MSCI
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WisdomTree and Amundi is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree NASDAQ 100 and Amundi MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi MSCI USA and WisdomTree NASDAQ 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 NASDAQ 100 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 USA has no effect on the direction of WisdomTree NASDAQ i.e., WisdomTree NASDAQ and Amundi MSCI go up and down completely randomly.
Pair Corralation between WisdomTree NASDAQ and Amundi MSCI
Assuming the 90 days trading horizon WisdomTree NASDAQ 100 is expected to generate 3.74 times more return on investment than Amundi MSCI. However, WisdomTree NASDAQ is 3.74 times more volatile than Amundi MSCI USA. It trades about 0.06 of its potential returns per unit of risk. Amundi MSCI USA is currently generating about 0.2 per unit of risk. If you would invest 22,916 in WisdomTree NASDAQ 100 on August 30, 2024 and sell it today you would earn a total of 759.00 from holding WisdomTree NASDAQ 100 or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree NASDAQ 100 vs. Amundi MSCI USA
Performance |
| Timeline |
| WisdomTree NASDAQ 100 |
| Amundi MSCI USA |
WisdomTree NASDAQ and Amundi MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree NASDAQ and Amundi MSCI
The main advantage of trading using opposite WisdomTree NASDAQ and Amundi MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree NASDAQ 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 NASDAQ vs. WisdomTree Zinc | WisdomTree NASDAQ vs. WisdomTree Brent Crude | WisdomTree NASDAQ vs. WisdomTree Aluminium 2x | WisdomTree NASDAQ vs. WisdomTree Enhanced Commodity |
| Amundi MSCI vs. Vanguard FTSE Developed | Amundi MSCI vs. Leverage Shares 2x | Amundi MSCI vs. Amundi Index Solutions | Amundi MSCI vs. Amundi Index Solutions |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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