Correlation Between WisdomTree Enhanced and WisdomTree Petroleum
Can any of the company-specific risk be diversified away by investing in both WisdomTree Enhanced and WisdomTree Petroleum 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 Enhanced and WisdomTree Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Enhanced Commodity and WisdomTree Petroleum 2x, you can compare the effects of market volatilities on WisdomTree Enhanced and WisdomTree Petroleum 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 Enhanced with a short position of WisdomTree Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Enhanced and WisdomTree Petroleum.
Diversification Opportunities for WisdomTree Enhanced and WisdomTree Petroleum
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WisdomTree and WisdomTree is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Enhanced Commodity and WisdomTree Petroleum 2x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Petroleum and WisdomTree Enhanced 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 Enhanced Commodity are associated (or correlated) with WisdomTree Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Petroleum has no effect on the direction of WisdomTree Enhanced i.e., WisdomTree Enhanced and WisdomTree Petroleum go up and down completely randomly.
Pair Corralation between WisdomTree Enhanced and WisdomTree Petroleum
Assuming the 90 days trading horizon WisdomTree Enhanced Commodity is expected to under-perform the WisdomTree Petroleum. But the etf apears to be less risky and, when comparing its historical volatility, WisdomTree Enhanced Commodity is 4.81 times less risky than WisdomTree Petroleum. The etf trades about -0.03 of its potential returns per unit of risk. The WisdomTree Petroleum 2x is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,694 in WisdomTree Petroleum 2x on September 2, 2024 and sell it today you would lose (34.00) from holding WisdomTree Petroleum 2x or give up 0.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
WisdomTree Enhanced Commodity vs. WisdomTree Petroleum 2x
Performance |
| Timeline |
| WisdomTree Enhanced |
| WisdomTree Petroleum |
WisdomTree Enhanced and WisdomTree Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Enhanced and WisdomTree Petroleum
The main advantage of trading using opposite WisdomTree Enhanced and WisdomTree Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Enhanced position performs unexpectedly, WisdomTree Petroleum 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 Petroleum will offset losses from the drop in WisdomTree Petroleum's long position.| WisdomTree Enhanced vs. WisdomTree Natural Gas | WisdomTree Enhanced vs. WisdomTree Natural Gas | WisdomTree Enhanced vs. Leverage Shares 2x | WisdomTree Enhanced vs. WisdomTree Silver 3x |
| WisdomTree Petroleum vs. GraniteShares 3x Short | WisdomTree Petroleum vs. WisdomTree Natural Gas | WisdomTree Petroleum vs. Leverage Shares 3x | WisdomTree Petroleum vs. WisdomTree SP 500 |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |