Correlation Between WisdomTree Brent and WisdomTree Broad
Can any of the company-specific risk be diversified away by investing in both WisdomTree Brent and WisdomTree Broad 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 Brent and WisdomTree Broad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Brent Crude and WisdomTree Broad Commodities, you can compare the effects of market volatilities on WisdomTree Brent and WisdomTree Broad 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 Brent with a short position of WisdomTree Broad. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Brent and WisdomTree Broad.
Diversification Opportunities for WisdomTree Brent and WisdomTree Broad
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between WisdomTree and WisdomTree is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Brent Crude and WisdomTree Broad Commodities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Broad Com and WisdomTree Brent 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 Brent Crude are associated (or correlated) with WisdomTree Broad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Broad Com has no effect on the direction of WisdomTree Brent i.e., WisdomTree Brent and WisdomTree Broad go up and down completely randomly.
Pair Corralation between WisdomTree Brent and WisdomTree Broad
Assuming the 90 days trading horizon WisdomTree Brent Crude is expected to generate 4.99 times more return on investment than WisdomTree Broad. However, WisdomTree Brent is 4.99 times more volatile than WisdomTree Broad Commodities. It trades about 0.15 of its potential returns per unit of risk. WisdomTree Broad Commodities is currently generating about 0.32 per unit of risk. If you would invest 1,702 in WisdomTree Brent Crude on October 24, 2025 and sell it today you would earn a total of 225.00 from holding WisdomTree Brent Crude or generate 13.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Brent Crude vs. WisdomTree Broad Commodities
Performance |
| Timeline |
| WisdomTree Brent Crude |
| WisdomTree Broad Com |
WisdomTree Brent and WisdomTree Broad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Brent and WisdomTree Broad
The main advantage of trading using opposite WisdomTree Brent and WisdomTree Broad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Brent position performs unexpectedly, WisdomTree Broad 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 Broad will offset losses from the drop in WisdomTree Broad's long position.| WisdomTree Brent vs. WisdomTree Zinc | WisdomTree Brent vs. WisdomTree Aluminium 2x | WisdomTree Brent vs. WisdomTree Enhanced Commodity | WisdomTree Brent vs. WisdomTree Gold 3x |
| WisdomTree Broad vs. WisdomTree Zinc | WisdomTree Broad vs. WisdomTree Brent Crude | WisdomTree Broad vs. WisdomTree Aluminium 2x | WisdomTree Broad vs. WisdomTree Enhanced Commodity |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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