Correlation Between WisdomTree New and Cambiar Aggressive

Can any of the company-specific risk be diversified away by investing in both WisdomTree New and Cambiar Aggressive 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 New and Cambiar Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WisdomTree New Economy and Cambiar Aggressive Value, you can compare the effects of market volatilities on WisdomTree New and Cambiar Aggressive 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 New with a short position of Cambiar Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree New and Cambiar Aggressive.

Diversification Opportunities for WisdomTree New and Cambiar Aggressive

-0.41

Correlation Coefficient

WisdomTree New  Cambiar Aggressive

Very good diversification

The 3 months correlation between WisdomTree and Cambiar is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree New Economy and Cambiar Aggressive Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambiar Aggressive Value and WisdomTree New 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 New Economy are associated (or correlated) with Cambiar Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambiar Aggressive Value has no effect on the direction of WisdomTree New i.e., WisdomTree New and Cambiar Aggressive go up and down completely randomly.

Pair Corralation between WisdomTree New and Cambiar Aggressive

Given the investment horizon of 90 days WisdomTree New Economy is expected to under-perform the Cambiar Aggressive. In addition to that, WisdomTree New is 1.06 times more volatile than Cambiar Aggressive Value. It trades about -0.01 of its total potential returns per unit of risk. Cambiar Aggressive Value is currently generating about 0.07 per unit of volatility. If you would invest  2,973  in Cambiar Aggressive Value on August 30, 2024 and sell it today you would earn a total of  97.00  from holding Cambiar Aggressive Value or generate 3.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

WisdomTree New Economy  vs.  Cambiar Aggressive Value

WisdomTree New Economy

Risk-Adjusted Performance

0 of 100

Very Weak

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

Cambiar Aggressive Value

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cambiar Aggressive Value are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong primary indicators, Cambiar Aggressive is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with WisdomTree New and Cambiar Aggressive

The main advantage of trading using opposite WisdomTree New and Cambiar Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree New position performs unexpectedly, Cambiar Aggressive 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 Cambiar Aggressive will offset losses from the drop in Cambiar Aggressive's long position.

The idea behind WisdomTree New Economy and Cambiar Aggressive Value 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.