Correlation Between WisdomTree Short and Lyxor Core
Can any of the company-specific risk be diversified away by investing in both WisdomTree Short and Lyxor Core 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 Short and Lyxor Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Short GBP and Lyxor Core Global, you can compare the effects of market volatilities on WisdomTree Short and Lyxor Core 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 Short with a short position of Lyxor Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Short and Lyxor Core.
Diversification Opportunities for WisdomTree Short and Lyxor Core
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WisdomTree and Lyxor is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Short GBP and Lyxor Core Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor Core Global and WisdomTree Short 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 Short GBP are associated (or correlated) with Lyxor Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor Core Global has no effect on the direction of WisdomTree Short i.e., WisdomTree Short and Lyxor Core go up and down completely randomly.
Pair Corralation between WisdomTree Short and Lyxor Core
Assuming the 90 days trading horizon WisdomTree Short GBP is expected to generate 0.96 times more return on investment than Lyxor Core. However, WisdomTree Short GBP is 1.04 times less risky than Lyxor Core. It trades about 0.03 of its potential returns per unit of risk. Lyxor Core Global is currently generating about 0.0 per unit of risk. If you would invest 5,891 in WisdomTree Short GBP on August 27, 2024 and sell it today you would earn a total of 344.00 from holding WisdomTree Short GBP or generate 5.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Short GBP vs. Lyxor Core Global
Performance |
| Timeline |
| WisdomTree Short GBP |
| Lyxor Core Global |
WisdomTree Short and Lyxor Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Short and Lyxor Core
The main advantage of trading using opposite WisdomTree Short and Lyxor Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Short position performs unexpectedly, Lyxor Core 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 Core will offset losses from the drop in Lyxor Core's long position.| WisdomTree Short vs. Leverage Shares 3x | WisdomTree Short vs. WisdomTree SP 500 | WisdomTree Short vs. WisdomTree Silver 3x | WisdomTree Short vs. Leverage Shares 3x |
| Lyxor Core vs. Leverage Shares 3x | Lyxor Core vs. Leverage Shares 3x | Lyxor Core vs. Leverage Shares 3x | Lyxor Core vs. WisdomTree Short GBP |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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