Correlation Between WisdomTree Alternative and ProShares Inflation
Can any of the company-specific risk be diversified away by investing in both WisdomTree Alternative and ProShares Inflation 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 Alternative and ProShares Inflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Alternative Income and ProShares Inflation Expectations, you can compare the effects of market volatilities on WisdomTree Alternative and ProShares Inflation 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 Alternative with a short position of ProShares Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Alternative and ProShares Inflation.
Diversification Opportunities for WisdomTree Alternative and ProShares Inflation
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WisdomTree and ProShares is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Alternative Income and ProShares Inflation Expectatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Inflation and WisdomTree Alternative 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 Alternative Income are associated (or correlated) with ProShares Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Inflation has no effect on the direction of WisdomTree Alternative i.e., WisdomTree Alternative and ProShares Inflation go up and down completely randomly.
Pair Corralation between WisdomTree Alternative and ProShares Inflation
Given the investment horizon of 90 days WisdomTree Alternative Income is expected to under-perform the ProShares Inflation. In addition to that, WisdomTree Alternative is 1.2 times more volatile than ProShares Inflation Expectations. It trades about -0.06 of its total potential returns per unit of risk. ProShares Inflation Expectations is currently generating about 0.15 per unit of volatility. If you would invest 3,174 in ProShares Inflation Expectations on September 18, 2024 and sell it today you would earn a total of 141.00 from holding ProShares Inflation Expectations or generate 4.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.44% |
Values | Daily Returns |
WisdomTree Alternative Income vs. ProShares Inflation Expectatio
Performance |
Timeline |
WisdomTree Alternative |
ProShares Inflation |
WisdomTree Alternative and ProShares Inflation Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with WisdomTree Alternative and ProShares Inflation
The main advantage of trading using opposite WisdomTree Alternative and ProShares Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Alternative position performs unexpectedly, ProShares Inflation 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 ProShares Inflation will offset losses from the drop in ProShares Inflation's long position.WisdomTree Alternative vs. SPDR Bloomberg Barclays | WisdomTree Alternative vs. SPDR SSGA Fixed | WisdomTree Alternative vs. SPDR DoubleLine Short | WisdomTree Alternative vs. SPDR Portfolio Corporate |
ProShares Inflation vs. SPDR SSgA Multi Asset | ProShares Inflation vs. ProShares Hedge Replication | ProShares Inflation vs. ProShares Short 7 10 | ProShares Inflation vs. ProShares Merger ETF |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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