Correlation Between CMG Cleantech and WISDOMTREE AGRICULTURE

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

By analyzing existing cross correlation between CMG Cleantech SA and WISDOMTREE AGRICULTURE, you can compare the effects of market volatilities on CMG Cleantech and WISDOMTREE AGRICULTURE 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 CMG Cleantech with a short position of WISDOMTREE AGRICULTURE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CMG Cleantech and WISDOMTREE AGRICULTURE.

Diversification Opportunities for CMG Cleantech and WISDOMTREE AGRICULTURE

0.27

Correlation Coefficient

CMG Cleantech  WISDOMTREE AGRICULTURE

Modest diversification

The 3 months correlation between CMG and WISDOMTREE is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding CMG Cleantech SA and WISDOMTREE AGRICULTURE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WISDOMTREE AGRICULTURE and CMG Cleantech 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 CMG Cleantech SA are associated (or correlated) with WISDOMTREE AGRICULTURE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WISDOMTREE AGRICULTURE has no effect on the direction of CMG Cleantech i.e., CMG Cleantech and WISDOMTREE AGRICULTURE go up and down completely randomly.

Pair Corralation between CMG Cleantech and WISDOMTREE AGRICULTURE

Assuming the 90 days trading horizon CMG Cleantech SA is expected to under-perform the WISDOMTREE AGRICULTURE. In addition to that, CMG Cleantech is 17.17 times more volatile than WISDOMTREE AGRICULTURE. It trades about -0.28 of its total potential returns per unit of risk. WISDOMTREE AGRICULTURE is currently generating about -0.13 per unit of volatility. If you would invest  512.00  in WISDOMTREE AGRICULTURE on April 25, 2025 and sell it today you would lose (7.00) from holding WISDOMTREE AGRICULTURE or give up 1.37% of portfolio value over 90 days.

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

CMG Cleantech SA  vs.  WISDOMTREE AGRICULTURE

CMG Cleantech SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days CMG Cleantech SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with abnormal performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in August 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

WISDOMTREE AGRICULTURE

Risk-Adjusted Performance

Very Weak

Over the last 90 days WISDOMTREE AGRICULTURE has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, WISDOMTREE AGRICULTURE is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with CMG Cleantech and WISDOMTREE AGRICULTURE

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

The idea behind CMG Cleantech SA and WISDOMTREE AGRICULTURE 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.