Correlation Between WisdomTree Managed and FT Cboe
Can any of the company-specific risk be diversified away by investing in both WisdomTree Managed and FT Cboe 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 FT Cboe 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 FT Cboe Vest, you can compare the effects of market volatilities on WisdomTree Managed and FT Cboe 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 FT Cboe. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Managed and FT Cboe.
Diversification Opportunities for WisdomTree Managed and FT Cboe
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WisdomTree and DAUG is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Managed Futures and FT Cboe Vest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FT Cboe Vest 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 FT Cboe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FT Cboe Vest has no effect on the direction of WisdomTree Managed i.e., WisdomTree Managed and FT Cboe go up and down completely randomly.
Pair Corralation between WisdomTree Managed and FT Cboe
Given the investment horizon of 90 days WisdomTree Managed Futures is expected to generate 0.67 times more return on investment than FT Cboe. However, WisdomTree Managed Futures is 1.49 times less risky than FT Cboe. It trades about 0.12 of its potential returns per unit of risk. FT Cboe Vest is currently generating about 0.06 per unit of risk. If you would invest 3,464 in WisdomTree Managed Futures on March 20, 2025 and sell it today you would earn a total of 32.00 from holding WisdomTree Managed Futures or generate 0.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
WisdomTree Managed Futures vs. FT Cboe Vest
Performance |
| Timeline |
| WisdomTree Managed |
| FT Cboe Vest |
WisdomTree Managed and FT Cboe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Managed and FT Cboe
The main advantage of trading using opposite WisdomTree Managed and FT Cboe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Managed position performs unexpectedly, FT Cboe 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 FT Cboe will offset losses from the drop in FT Cboe's long position.| WisdomTree Managed vs. First Trust Managed | WisdomTree Managed vs. iMGP DBi Managed | WisdomTree Managed vs. First Trust LongShort | WisdomTree Managed vs. SPDR SSgA Multi Asset |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |