Correlation Between ANT and WisdomTree Ethereum

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

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

Diversification Opportunities for ANT and WisdomTree Ethereum

-0.41

Correlation Coefficient

ANT  WisdomTree Ethereum

Very good diversification

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

Pair Corralation between ANT and WisdomTree Ethereum

Assuming the 90 days trading horizon ANT is expected to generate 13.71 times more return on investment than WisdomTree Ethereum. However, ANT is 13.71 times more volatile than WisdomTree Ethereum ETC. It trades about 0.16 of its potential returns per unit of risk. WisdomTree Ethereum ETC is currently generating about 0.14 per unit of risk. If you would invest  147.00  in ANT on October 27, 2024 and sell it today you would earn a total of  0.00  from holding ANT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

ANT  vs.  WisdomTree Ethereum ETC

ANT

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, ANT exhibited solid returns over the last few months and may actually be approaching a breakup point.

WisdomTree Ethereum ETC

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Ethereum ETC are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, WisdomTree Ethereum unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANT and WisdomTree Ethereum

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

The idea behind ANT and WisdomTree Ethereum ETC 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.