Correlation Between International Business and WisdomTree Issuer

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

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

Diversification Opportunities for International Business and WisdomTree Issuer

0.78

Correlation Coefficient

International Business  WisdomTree Issuer

Poor diversification

The 3 months correlation between International and WisdomTree is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and WisdomTree Issuer ICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Issuer ICAV and International Business 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 International Business Machines are associated (or correlated) with WisdomTree Issuer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Issuer ICAV has no effect on the direction of International Business i.e., International Business and WisdomTree Issuer go up and down completely randomly.

Pair Corralation between International Business and WisdomTree Issuer

Considering the 90-day investment horizon International Business is expected to generate 1.24 times less return on investment than WisdomTree Issuer. In addition to that, International Business is 2.19 times more volatile than WisdomTree Issuer ICAV. It trades about 0.08 of its total potential returns per unit of risk. WisdomTree Issuer ICAV is currently generating about 0.21 per unit of volatility. If you would invest  2,813  in WisdomTree Issuer ICAV on May 2, 2025 and sell it today you would earn a total of  259.00  from holding WisdomTree Issuer ICAV or generate 9.21% return on investment over 90 days.

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

International Business Machine  vs.  WisdomTree Issuer ICAV

International Business

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in International Business Machines are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, International Business may actually be approaching a critical reversion point that can send shares even higher in August 2025.

WisdomTree Issuer ICAV

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Issuer ICAV are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak primary indicators, WisdomTree Issuer may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with International Business and WisdomTree Issuer

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

The idea behind International Business Machines and WisdomTree Issuer ICAV 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.