Correlation Between Xtrackers Nikkei and WisdomTree WTI
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By analyzing existing cross correlation between Xtrackers Nikkei 225 and WisdomTree WTI Crude, you can compare the effects of market volatilities on Xtrackers Nikkei and WisdomTree WTI 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 Xtrackers Nikkei with a short position of WisdomTree WTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Nikkei and WisdomTree WTI.
Diversification Opportunities for Xtrackers Nikkei and WisdomTree WTI
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Xtrackers and WisdomTree is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Nikkei 225 and WisdomTree WTI Crude in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree WTI Crude and Xtrackers Nikkei 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 Xtrackers Nikkei 225 are associated (or correlated) with WisdomTree WTI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree WTI Crude has no effect on the direction of Xtrackers Nikkei i.e., Xtrackers Nikkei and WisdomTree WTI go up and down completely randomly.
Pair Corralation between Xtrackers Nikkei and WisdomTree WTI
Assuming the 90 days trading horizon Xtrackers Nikkei is expected to generate 1.63 times less return on investment than WisdomTree WTI. But when comparing it to its historical volatility, Xtrackers Nikkei 225 is 1.65 times less risky than WisdomTree WTI. It trades about 0.09 of its potential returns per unit of risk. WisdomTree WTI Crude is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 845.00 in WisdomTree WTI Crude on September 17, 2024 and sell it today you would earn a total of 84.00 from holding WisdomTree WTI Crude or generate 9.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Xtrackers Nikkei 225 vs. WisdomTree WTI Crude
Performance |
Timeline |
Xtrackers Nikkei 225 |
WisdomTree WTI Crude |
Xtrackers Nikkei and WisdomTree WTI Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xtrackers Nikkei and WisdomTree WTI
The main advantage of trading using opposite Xtrackers Nikkei and WisdomTree WTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Nikkei position performs unexpectedly, WisdomTree WTI 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 WisdomTree WTI will offset losses from the drop in WisdomTree WTI's long position.Xtrackers Nikkei vs. Xtrackers II Global | Xtrackers Nikkei vs. Xtrackers FTSE | Xtrackers Nikkei vs. Xtrackers SP 500 | Xtrackers Nikkei vs. Xtrackers MSCI |
WisdomTree WTI vs. UBS Fund Solutions | WisdomTree WTI vs. Xtrackers II | WisdomTree WTI vs. Xtrackers Nikkei 225 | WisdomTree WTI vs. iShares VII PLC |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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