Correlation Between Catalyst/map Global and Wisdomtree Siegel

Can any of the company-specific risk be diversified away by investing in both Catalyst/map Global and Wisdomtree Siegel 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 Catalyst/map Global and Wisdomtree Siegel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Catalystmap Global Equity and Wisdomtree Siegel Moderate, you can compare the effects of market volatilities on Catalyst/map Global and Wisdomtree Siegel 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 Catalyst/map Global with a short position of Wisdomtree Siegel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/map Global and Wisdomtree Siegel.

Diversification Opportunities for Catalyst/map Global and Wisdomtree Siegel

0.19

Correlation Coefficient

Catalyst/map Global  Wisdomtree Siegel

Average diversification

The 3 months correlation between Catalyst/map and Wisdomtree is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmap Global Equity and Wisdomtree Siegel Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wisdomtree Siegel and Catalyst/map Global 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 Catalystmap Global Equity are associated (or correlated) with Wisdomtree Siegel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wisdomtree Siegel has no effect on the direction of Catalyst/map Global i.e., Catalyst/map Global and Wisdomtree Siegel go up and down completely randomly.

Pair Corralation between Catalyst/map Global and Wisdomtree Siegel

Assuming the 90 days horizon Catalystmap Global Equity is expected to under-perform the Wisdomtree Siegel. In addition to that, Catalyst/map Global is 3.01 times more volatile than Wisdomtree Siegel Moderate. It trades about -0.39 of its total potential returns per unit of risk. Wisdomtree Siegel Moderate is currently generating about -0.45 per unit of volatility. If you would invest  1,132  in Wisdomtree Siegel Moderate on October 4, 2024 and sell it today you would lose (54.00) from holding Wisdomtree Siegel Moderate or give up 4.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Catalystmap Global Equity  vs.  Wisdomtree Siegel Moderate

Catalystmap Global Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catalystmap Global Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Wisdomtree Siegel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wisdomtree Siegel Moderate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Wisdomtree Siegel is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Catalyst/map Global and Wisdomtree Siegel

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

The idea behind Catalystmap Global Equity and Wisdomtree Siegel Moderate 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.