Correlation Between WisdomTree Managed and IShares GNMA
Can any of the company-specific risk be diversified away by investing in both WisdomTree Managed and IShares GNMA 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 IShares GNMA 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 iShares GNMA Bond, you can compare the effects of market volatilities on WisdomTree Managed and IShares GNMA 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 IShares GNMA. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Managed and IShares GNMA.
Diversification Opportunities for WisdomTree Managed and IShares GNMA
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WisdomTree and IShares is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Managed Futures and iShares GNMA Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares GNMA Bond 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 IShares GNMA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares GNMA Bond has no effect on the direction of WisdomTree Managed i.e., WisdomTree Managed and IShares GNMA go up and down completely randomly.
Pair Corralation between WisdomTree Managed and IShares GNMA
Given the investment horizon of 90 days WisdomTree Managed Futures is expected to generate 3.31 times more return on investment than IShares GNMA. However, WisdomTree Managed is 3.31 times more volatile than iShares GNMA Bond. It trades about 0.1 of its potential returns per unit of risk. iShares GNMA Bond is currently generating about 0.15 per unit of risk. If you would invest 3,508 in WisdomTree Managed Futures on September 1, 2024 and sell it today you would earn a total of 96.00 from holding WisdomTree Managed Futures or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
WisdomTree Managed Futures vs. iShares GNMA Bond
Performance |
| Timeline |
| WisdomTree Managed |
| iShares GNMA Bond |
WisdomTree Managed and IShares GNMA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Managed and IShares GNMA
The main advantage of trading using opposite WisdomTree Managed and IShares GNMA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Managed position performs unexpectedly, IShares GNMA 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 IShares GNMA will offset losses from the drop in IShares GNMA's long position.| WisdomTree Managed vs. First Trust LongShort | WisdomTree Managed vs. First Trust Alternative | WisdomTree Managed vs. iMGP DBi Managed | WisdomTree Managed vs. First Trust Japan |
| IShares GNMA vs. iShares Agency Bond | IShares GNMA vs. iShares 1 3 Year | IShares GNMA vs. iShares Core 1 5 | IShares GNMA vs. iShares Core 10 |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |