Correlation Between Wisdomtree Digital and Aama Income
Can any of the company-specific risk be diversified away by investing in both Wisdomtree Digital and Aama Income 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 Digital and Aama Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wisdomtree Digital Trust and Aama Income Fund, you can compare the effects of market volatilities on Wisdomtree Digital and Aama Income 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 Digital with a short position of Aama Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wisdomtree Digital and Aama Income.
Diversification Opportunities for Wisdomtree Digital and Aama Income
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wisdomtree and Aama is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Wisdomtree Digital Trust and Aama Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aama Income Fund and Wisdomtree Digital 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 Digital Trust are associated (or correlated) with Aama Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aama Income Fund has no effect on the direction of Wisdomtree Digital i.e., Wisdomtree Digital and Aama Income go up and down completely randomly.
Pair Corralation between Wisdomtree Digital and Aama Income
Assuming the 90 days horizon Wisdomtree Digital Trust is expected to under-perform the Aama Income. In addition to that, Wisdomtree Digital is 14.18 times more volatile than Aama Income Fund. It trades about -0.06 of its total potential returns per unit of risk. Aama Income Fund is currently generating about 0.37 per unit of volatility. If you would invest 2,392 in Aama Income Fund on November 28, 2024 and sell it today you would earn a total of 9.00 from holding Aama Income Fund or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Wisdomtree Digital Trust vs. Aama Income Fund
Performance |
| Timeline |
| Wisdomtree Digital Trust |
| Aama Income Fund |
Wisdomtree Digital and Aama Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wisdomtree Digital and Aama Income
The main advantage of trading using opposite Wisdomtree Digital and Aama Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wisdomtree Digital position performs unexpectedly, Aama Income 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 Aama Income will offset losses from the drop in Aama Income's long position.| Wisdomtree Digital vs. Pace International Emerging | Wisdomtree Digital vs. Rbc Emerging Markets | Wisdomtree Digital vs. Jpmorgan Emerging Markets | Wisdomtree Digital vs. The Hartford Emerging |
| Aama Income vs. Guidemark E Fixed | Aama Income vs. Nasdaq 100 2x Strategy | Aama Income vs. Federated Government Income | Aama Income vs. Gmo Quality Fund |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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