Correlation Between Wells Fargo and Wasatch Emerging
Can any of the company-specific risk be diversified away by investing in both Wells Fargo and Wasatch Emerging 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 Wells Fargo and Wasatch Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wells Fargo Advantage and Wasatch Emerging Markets, you can compare the effects of market volatilities on Wells Fargo and Wasatch Emerging 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 Wells Fargo with a short position of Wasatch Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wells Fargo and Wasatch Emerging.
Diversification Opportunities for Wells Fargo and Wasatch Emerging
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Wells and Wasatch is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Wells Fargo Advantage and Wasatch Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch Emerging Markets and Wells Fargo 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 Wells Fargo Advantage are associated (or correlated) with Wasatch Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch Emerging Markets has no effect on the direction of Wells Fargo i.e., Wells Fargo and Wasatch Emerging go up and down completely randomly.
Pair Corralation between Wells Fargo and Wasatch Emerging
Assuming the 90 days horizon Wells Fargo Advantage is expected to under-perform the Wasatch Emerging. In addition to that, Wells Fargo is 1.19 times more volatile than Wasatch Emerging Markets. It trades about -0.02 of its total potential returns per unit of risk. Wasatch Emerging Markets is currently generating about 0.08 per unit of volatility. If you would invest 276.00 in Wasatch Emerging Markets on June 1, 2025 and sell it today you would earn a total of 11.00 from holding Wasatch Emerging Markets or generate 3.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.83% |
| Values | Daily Returns |
Wells Fargo Advantage vs. Wasatch Emerging Markets
Performance |
| Timeline |
| Wells Fargo Advantage |
| Wasatch Emerging Markets |
Wells Fargo and Wasatch Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wells Fargo and Wasatch Emerging
The main advantage of trading using opposite Wells Fargo and Wasatch Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wells Fargo position performs unexpectedly, Wasatch Emerging 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 Wasatch Emerging will offset losses from the drop in Wasatch Emerging's long position.| Wells Fargo vs. Auer Growth Fund | Wells Fargo vs. Calamos Growth Fund | Wells Fargo vs. Artisan Small Cap | Wells Fargo vs. Mairs Power Growth |
| Wasatch Emerging vs. Wasatch Small Cap | Wasatch Emerging vs. Wasatch Emerging Markets | Wasatch Emerging vs. Wasatch Emerging Markets | Wasatch Emerging vs. Wasatch Global Select |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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