Correlation Between WisdomTree Managed and Aptus Defined
Can any of the company-specific risk be diversified away by investing in both WisdomTree Managed and Aptus Defined 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 Managed and Aptus Defined into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Managed Futures and Aptus Defined Risk, you can compare the effects of market volatilities on WisdomTree Managed and Aptus Defined 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 Managed with a short position of Aptus Defined. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Managed and Aptus Defined.
Diversification Opportunities for WisdomTree Managed and Aptus Defined
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WisdomTree and Aptus is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Managed Futures and Aptus Defined Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptus Defined Risk and WisdomTree Managed 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 Managed Futures are associated (or correlated) with Aptus Defined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptus Defined Risk has no effect on the direction of WisdomTree Managed i.e., WisdomTree Managed and Aptus Defined go up and down completely randomly.
Pair Corralation between WisdomTree Managed and Aptus Defined
Given the investment horizon of 90 days WisdomTree Managed Futures is expected to generate 2.54 times more return on investment than Aptus Defined. However, WisdomTree Managed is 2.54 times more volatile than Aptus Defined Risk. It trades about 0.07 of its potential returns per unit of risk. Aptus Defined Risk is currently generating about -0.06 per unit of risk. If you would invest 3,516 in WisdomTree Managed Futures on August 31, 2024 and sell it today you would earn a total of 67.00 from holding WisdomTree Managed Futures or generate 1.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Managed Futures vs. Aptus Defined Risk
Performance |
| Timeline |
| WisdomTree Managed |
| Aptus Defined Risk |
WisdomTree Managed and Aptus Defined Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Managed and Aptus Defined
The main advantage of trading using opposite WisdomTree Managed and Aptus Defined positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Managed position performs unexpectedly, Aptus Defined 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 Aptus Defined will offset losses from the drop in Aptus Defined's long position.| WisdomTree Managed vs. First Trust Managed | WisdomTree Managed vs. iMGP DBi Managed | WisdomTree Managed vs. First Trust LongShort | WisdomTree Managed vs. WisdomTree CBOE SP |
| Aptus Defined vs. Vanguard Intermediate Term Corporate | Aptus Defined vs. Vanguard Short Term Bond | Aptus Defined vs. Vanguard Long Term Corporate | Aptus Defined vs. Vanguard Short Term Treasury |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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