Correlation Between WisdomTree Wheat and Lyxor UCITS

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

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

Diversification Opportunities for WisdomTree Wheat and Lyxor UCITS

0.31

Correlation Coefficient

WisdomTree Wheat  Lyxor UCITS

Weak diversification

The 3 months correlation between WisdomTree and Lyxor is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Wheat EUR and Lyxor UCITS Daily in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor UCITS Daily and WisdomTree Wheat 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 Wheat EUR are associated (or correlated) with Lyxor UCITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor UCITS Daily has no effect on the direction of WisdomTree Wheat i.e., WisdomTree Wheat and Lyxor UCITS go up and down completely randomly.

Pair Corralation between WisdomTree Wheat and Lyxor UCITS

Assuming the 90 days trading horizon WisdomTree Wheat EUR is expected to generate 0.78 times more return on investment than Lyxor UCITS. However, WisdomTree Wheat EUR is 1.28 times less risky than Lyxor UCITS. It trades about -0.04 of its potential returns per unit of risk. Lyxor UCITS Daily is currently generating about -0.19 per unit of risk. If you would invest  1,744  in WisdomTree Wheat EUR on April 20, 2025 and sell it today you would lose (76.00) from holding WisdomTree Wheat EUR or give up 4.36% of portfolio value over 90 days.

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

WisdomTree Wheat EUR  vs.  Lyxor UCITS Daily

WisdomTree Wheat EUR

Risk-Adjusted Performance

Very Weak

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

Lyxor UCITS Daily

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lyxor UCITS Daily has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf's fundamental indicators remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Pair Trading with WisdomTree Wheat and Lyxor UCITS

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

The idea behind WisdomTree Wheat EUR and Lyxor UCITS Daily 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.