Correlation Between WisdomTree and Manhattan Bridge

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

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

Diversification Opportunities for WisdomTree and Manhattan Bridge

-0.38

Correlation Coefficient

WisdomTree  Manhattan Bridge

Very good diversification

The 3 months correlation between WisdomTree and Manhattan is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree and Manhattan Bridge Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manhattan Bridge Capital and WisdomTree 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 are associated (or correlated) with Manhattan Bridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manhattan Bridge Capital has no effect on the direction of WisdomTree i.e., WisdomTree and Manhattan Bridge go up and down completely randomly.

Pair Corralation between WisdomTree and Manhattan Bridge

Allowing for the 90-day total investment horizon WisdomTree is expected to under-perform the Manhattan Bridge. In addition to that, WisdomTree is 1.23 times more volatile than Manhattan Bridge Capital. It trades about -0.18 of its total potential returns per unit of risk. Manhattan Bridge Capital is currently generating about 0.12 per unit of volatility. If you would invest  526.00  in Manhattan Bridge Capital on December 21, 2024 and sell it today you would earn a total of  49.00  from holding Manhattan Bridge Capital or generate 9.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

WisdomTree  vs.  Manhattan Bridge Capital

WisdomTree

Risk-Adjusted Performance

Very Weak

Over the last 90 days WisdomTree has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Manhattan Bridge Capital

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Manhattan Bridge Capital are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Manhattan Bridge may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with WisdomTree and Manhattan Bridge

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

The idea behind WisdomTree and Manhattan Bridge Capital 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.