Correlation Between WisdomTree Managed and Humankind Investments

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Can any of the company-specific risk be diversified away by investing in both WisdomTree Managed and Humankind Investments 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 Humankind Investments 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 Humankind Investments, you can compare the effects of market volatilities on WisdomTree Managed and Humankind Investments 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 Humankind Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Managed and Humankind Investments.

Diversification Opportunities for WisdomTree Managed and Humankind Investments

0.67
  Correlation Coefficient

Poor diversification

The 3 months correlation between WisdomTree and Humankind is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Managed Futures and Humankind Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humankind Investments 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 Humankind Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humankind Investments has no effect on the direction of WisdomTree Managed i.e., WisdomTree Managed and Humankind Investments go up and down completely randomly.

Pair Corralation between WisdomTree Managed and Humankind Investments

Given the investment horizon of 90 days WisdomTree Managed Futures is expected to generate 87.56 times more return on investment than Humankind Investments. However, WisdomTree Managed is 87.56 times more volatile than Humankind Investments. It trades about 0.09 of its potential returns per unit of risk. Humankind Investments is currently generating about 0.29 per unit of risk. If you would invest  3,748  in WisdomTree Managed Futures on November 25, 2025 and sell it today you would earn a total of  137.00  from holding WisdomTree Managed Futures or generate 3.66% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy19.67%
ValuesDaily Returns

WisdomTree Managed Futures  vs.  Humankind Investments

 Performance 
       Timeline  
WisdomTree Managed 

Risk-Adjusted Performance

Mild

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Managed Futures are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, WisdomTree Managed is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.
Humankind Investments 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Over the last 90 days Humankind Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Humankind Investments is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

WisdomTree Managed and Humankind Investments Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with WisdomTree Managed and Humankind Investments

The main advantage of trading using opposite WisdomTree Managed and Humankind Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Managed position performs unexpectedly, Humankind Investments 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 Humankind Investments will offset losses from the drop in Humankind Investments' long position.
The idea behind WisdomTree Managed Futures and Humankind Investments pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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