Correlation Between SPDR Barclays and WisdomTree Yield
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays and WisdomTree Yield 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 SPDR Barclays and WisdomTree Yield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Barclays Intermediate and WisdomTree Yield Enhanced, you can compare the effects of market volatilities on SPDR Barclays and WisdomTree Yield 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 SPDR Barclays with a short position of WisdomTree Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and WisdomTree Yield.
Diversification Opportunities for SPDR Barclays and WisdomTree Yield
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between SPDR and WisdomTree is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Intermediate and WisdomTree Yield Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Yield Enhanced and SPDR Barclays 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 SPDR Barclays Intermediate are associated (or correlated) with WisdomTree Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Yield Enhanced has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and WisdomTree Yield go up and down completely randomly.
Pair Corralation between SPDR Barclays and WisdomTree Yield
Given the investment horizon of 90 days SPDR Barclays Intermediate is expected to generate 0.67 times more return on investment than WisdomTree Yield. However, SPDR Barclays Intermediate is 1.5 times less risky than WisdomTree Yield. It trades about 0.04 of its potential returns per unit of risk. WisdomTree Yield Enhanced is currently generating about -0.09 per unit of risk. If you would invest 3,318 in SPDR Barclays Intermediate on December 30, 2024 and sell it today you would earn a total of 5.00 from holding SPDR Barclays Intermediate or generate 0.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Barclays Intermediate vs. WisdomTree Yield Enhanced
Performance |
| Timeline |
| SPDR Barclays Interm |
| WisdomTree Yield Enhanced |
SPDR Barclays and WisdomTree Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and WisdomTree Yield
The main advantage of trading using opposite SPDR Barclays and WisdomTree Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays position performs unexpectedly, WisdomTree Yield 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 WisdomTree Yield will offset losses from the drop in WisdomTree Yield's long position.| SPDR Barclays vs. SPDR Barclays Short | ||
| SPDR Barclays vs. SPDR Bloomberg Emerging | ||
| SPDR Barclays vs. SPDR Barclays Long | ||
| SPDR Barclays vs. SPDR Barclays Short |
| WisdomTree Yield vs. WisdomTree Interest Rate | ||
| WisdomTree Yield vs. WisdomTree Interest Rate | ||
| WisdomTree Yield vs. SPDR Barclays Intermediate | ||
| WisdomTree Yield vs. WisdomTree International Hedged |
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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