Correlation Between WisdomTree and Federal Agricultural
Can any of the company-specific risk be diversified away by investing in both WisdomTree and Federal Agricultural 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 Federal Agricultural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree and Federal Agricultural Mortgage, you can compare the effects of market volatilities on WisdomTree and Federal Agricultural 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 Federal Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree and Federal Agricultural.
Diversification Opportunities for WisdomTree and Federal Agricultural
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WisdomTree and Federal is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree and Federal Agricultural Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Agricultural 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 Federal Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Agricultural has no effect on the direction of WisdomTree i.e., WisdomTree and Federal Agricultural go up and down completely randomly.
Pair Corralation between WisdomTree and Federal Agricultural
Allowing for the 90-day total investment horizon WisdomTree is expected to generate 0.94 times more return on investment than Federal Agricultural. However, WisdomTree is 1.06 times less risky than Federal Agricultural. It trades about -0.14 of its potential returns per unit of risk. Federal Agricultural Mortgage is currently generating about -0.15 per unit of risk. If you would invest 1,293 in WisdomTree on August 21, 2025 and sell it today you would lose (188.00) from holding WisdomTree or give up 14.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree vs. Federal Agricultural Mortgage
Performance |
| Timeline |
| WisdomTree |
| Federal Agricultural |
WisdomTree and Federal Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree and Federal Agricultural
The main advantage of trading using opposite WisdomTree and Federal Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree position performs unexpectedly, Federal Agricultural 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 Federal Agricultural will offset losses from the drop in Federal Agricultural's long position.| WisdomTree vs. Acadian Asset Management | WisdomTree vs. Tri Continental Closed | WisdomTree vs. Grab Holdings | WisdomTree vs. Oxford Lane Capital |
| Federal Agricultural vs. FinVolution Group | Federal Agricultural vs. 360 Finance | Federal Agricultural vs. OFG Bancorp | Federal Agricultural vs. City Holding |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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