Correlation Between WisdomTree Dynamic and Xtrackers FTSE
Can any of the company-specific risk be diversified away by investing in both WisdomTree Dynamic and Xtrackers FTSE 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 Dynamic and Xtrackers FTSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Dynamic Currency and Xtrackers FTSE Developed, you can compare the effects of market volatilities on WisdomTree Dynamic and Xtrackers FTSE 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 Dynamic with a short position of Xtrackers FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Dynamic and Xtrackers FTSE.
Diversification Opportunities for WisdomTree Dynamic and Xtrackers FTSE
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WisdomTree and Xtrackers is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Dynamic Currency and Xtrackers FTSE Developed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers FTSE Developed and WisdomTree Dynamic 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 Dynamic Currency are associated (or correlated) with Xtrackers FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers FTSE Developed has no effect on the direction of WisdomTree Dynamic i.e., WisdomTree Dynamic and Xtrackers FTSE go up and down completely randomly.
Pair Corralation between WisdomTree Dynamic and Xtrackers FTSE
Given the investment horizon of 90 days WisdomTree Dynamic Currency is expected to generate 0.94 times more return on investment than Xtrackers FTSE. However, WisdomTree Dynamic Currency is 1.06 times less risky than Xtrackers FTSE. It trades about 0.07 of its potential returns per unit of risk. Xtrackers FTSE Developed is currently generating about 0.06 per unit of risk. If you would invest 2,960 in WisdomTree Dynamic Currency on March 24, 2025 and sell it today you would earn a total of 961.00 from holding WisdomTree Dynamic Currency or generate 32.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Dynamic Currency vs. Xtrackers FTSE Developed
Performance |
| Timeline |
| WisdomTree Dynamic |
| Xtrackers FTSE Developed |
WisdomTree Dynamic and Xtrackers FTSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Dynamic and Xtrackers FTSE
The main advantage of trading using opposite WisdomTree Dynamic and Xtrackers FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Dynamic position performs unexpectedly, Xtrackers FTSE 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 Xtrackers FTSE will offset losses from the drop in Xtrackers FTSE's long position.| WisdomTree Dynamic vs. Xtrackers MSCI EAFE | WisdomTree Dynamic vs. iShares AsiaPacific Dividend | WisdomTree Dynamic vs. WBI Power Factor | WisdomTree Dynamic vs. Global X MSCI |
| Xtrackers FTSE vs. Xtrackers Russell Multifactor | Xtrackers FTSE vs. Xtrackers MSCI All | Xtrackers FTSE vs. WisdomTree Dynamic Currency | Xtrackers FTSE vs. Xtrackers MSCI Eurozone |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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