Correlation Between WisdomTree and Great Ajax
Can any of the company-specific risk be diversified away by investing in both WisdomTree and Great Ajax 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 and Great Ajax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree and Great Ajax Corp, you can compare the effects of market volatilities on WisdomTree and Great Ajax 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 with a short position of Great Ajax. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree and Great Ajax.
Diversification Opportunities for WisdomTree and Great Ajax
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WisdomTree and Great is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree and Great Ajax Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Ajax Corp and WisdomTree 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 are associated (or correlated) with Great Ajax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Ajax Corp has no effect on the direction of WisdomTree i.e., WisdomTree and Great Ajax go up and down completely randomly.
Pair Corralation between WisdomTree and Great Ajax
Allowing for the 90-day total investment horizon WisdomTree is expected to generate 1.61 times more return on investment than Great Ajax. However, WisdomTree is 1.61 times more volatile than Great Ajax Corp. It trades about 0.38 of its potential returns per unit of risk. Great Ajax Corp is currently generating about -0.17 per unit of risk. If you would invest 1,041 in WisdomTree on August 28, 2024 and sell it today you would earn a total of 179.00 from holding WisdomTree or generate 17.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
WisdomTree vs. Great Ajax Corp
Performance |
| Timeline |
| WisdomTree |
| Great Ajax Corp |
WisdomTree and Great Ajax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree and Great Ajax
The main advantage of trading using opposite WisdomTree and Great Ajax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree position performs unexpectedly, Great Ajax 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 Great Ajax will offset losses from the drop in Great Ajax's long position.| WisdomTree vs. Invesco Advantage MIT | WisdomTree vs. Invesco Municipal Trust | WisdomTree vs. Invesco California Value | WisdomTree vs. Victory Capital Holdings |
| Great Ajax vs. Blackstone Mortgage Trust | Great Ajax vs. Omega Healthcare Investors | Great Ajax vs. Medical Properties Trust |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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