Correlation Between Wealthsimple Shariah and Parametric Commodity

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

By analyzing existing cross correlation between Wealthsimple Shariah World and Parametric Modity Strategy, you can compare the effects of market volatilities on Wealthsimple Shariah and Parametric Commodity 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 Wealthsimple Shariah with a short position of Parametric Commodity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wealthsimple Shariah and Parametric Commodity.

Diversification Opportunities for Wealthsimple Shariah and Parametric Commodity

0.41

Correlation Coefficient

Wealthsimple Shariah  Parametric Commodity

Very weak diversification

The 3 months correlation between Wealthsimple and Parametric is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Wealthsimple Shariah World and Parametric Modity Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parametric Commodity and Wealthsimple Shariah 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 Wealthsimple Shariah World are associated (or correlated) with Parametric Commodity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parametric Commodity has no effect on the direction of Wealthsimple Shariah i.e., Wealthsimple Shariah and Parametric Commodity go up and down completely randomly.

Pair Corralation between Wealthsimple Shariah and Parametric Commodity

Assuming the 90 days trading horizon Wealthsimple Shariah World is not expected to generate positive returns. However, Wealthsimple Shariah World is 1.07 times less risky than Parametric Commodity. It waists most of its returns potential to compensate for thr risk taken. Parametric Commodity is generating about 0.19 per unit of risk. If you would invest  659.00  in Parametric Modity Strategy on August 20, 2025 and sell it today you would earn a total of  57.00  from holding Parametric Modity Strategy or generate 8.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

Wealthsimple Shariah World  vs.  Parametric Modity Strategy

Wealthsimple Shariah

Risk-Adjusted Performance

Weak

Over the last 90 days Wealthsimple Shariah World has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Wealthsimple Shariah is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Parametric Commodity

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Parametric Modity Strategy are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Parametric Commodity may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with Wealthsimple Shariah and Parametric Commodity

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

The idea behind Wealthsimple Shariah World and Parametric Modity Strategy 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.