Correlation Between SPDR Barclays and WisdomTree
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays and WisdomTree 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 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Barclays Short and WisdomTree 1 3 Year, you can compare the effects of market volatilities on SPDR Barclays and WisdomTree 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and WisdomTree.
Diversification Opportunities for SPDR Barclays and WisdomTree
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and WisdomTree is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Short and WisdomTree 1 3 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree 1 3 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 Short are associated (or correlated) with WisdomTree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree 1 3 has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and WisdomTree go up and down completely randomly.
Pair Corralation between SPDR Barclays and WisdomTree
Given the investment horizon of 90 days SPDR Barclays is expected to generate 1.18 times less return on investment than WisdomTree. But when comparing it to its historical volatility, SPDR Barclays Short is 1.05 times less risky than WisdomTree. It trades about 0.13 of its potential returns per unit of risk. WisdomTree 1 3 Year is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 5,012 in WisdomTree 1 3 Year on September 1, 2024 and sell it today you would earn a total of 15.00 from holding WisdomTree 1 3 Year or generate 0.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
SPDR Barclays Short vs. WisdomTree 1 3 Year
Performance |
| Timeline |
| SPDR Barclays Short |
| WisdomTree 1 3 |
SPDR Barclays and WisdomTree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and WisdomTree
The main advantage of trading using opposite SPDR Barclays and WisdomTree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays position performs unexpectedly, WisdomTree 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 will offset losses from the drop in WisdomTree's long position.| SPDR Barclays vs. SPDR Barclays Long | SPDR Barclays vs. SPDR Portfolio Intermediate | SPDR Barclays vs. SPDR Barclays Short | SPDR Barclays vs. SPDR Barclays Intermediate |
| WisdomTree vs. SPDR Barclays Long | WisdomTree vs. SPDR Portfolio Intermediate | WisdomTree vs. SPDR Barclays Short | WisdomTree vs. SPDR Barclays Intermediate |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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