Correlation Between WisdomTree Gold and WisdomTree WTI
Can any of the company-specific risk be diversified away by investing in both WisdomTree Gold and WisdomTree WTI 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 Gold and WisdomTree WTI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Gold 3x and WisdomTree WTI Crude, you can compare the effects of market volatilities on WisdomTree Gold and WisdomTree WTI 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 Gold with a short position of WisdomTree WTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Gold and WisdomTree WTI.
Diversification Opportunities for WisdomTree Gold and WisdomTree WTI
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WisdomTree and WisdomTree is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Gold 3x and WisdomTree WTI Crude in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree WTI Crude and WisdomTree Gold 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 Gold 3x are associated (or correlated) with WisdomTree WTI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree WTI Crude has no effect on the direction of WisdomTree Gold i.e., WisdomTree Gold and WisdomTree WTI go up and down completely randomly.
Pair Corralation between WisdomTree Gold and WisdomTree WTI
Assuming the 90 days trading horizon WisdomTree Gold 3x is expected to generate 1.65 times more return on investment than WisdomTree WTI. However, WisdomTree Gold is 1.65 times more volatile than WisdomTree WTI Crude. It trades about 0.15 of its potential returns per unit of risk. WisdomTree WTI Crude is currently generating about 0.12 per unit of risk. If you would invest 19,380 in WisdomTree Gold 3x on November 29, 2025 and sell it today you would earn a total of 11,339 from holding WisdomTree Gold 3x or generate 58.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
WisdomTree Gold 3x vs. WisdomTree WTI Crude
Performance |
| Timeline |
| WisdomTree Gold 3x |
| WisdomTree WTI Crude |
WisdomTree Gold and WisdomTree WTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Gold and WisdomTree WTI
The main advantage of trading using opposite WisdomTree Gold and WisdomTree WTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Gold position performs unexpectedly, WisdomTree WTI 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 WTI will offset losses from the drop in WisdomTree WTI's long position.| WisdomTree Gold vs. Vanguard FTSE Developed | WisdomTree Gold vs. Leverage Shares 2x | WisdomTree Gold vs. Amundi Index Solutions | WisdomTree Gold vs. Amundi Index Solutions |
| WisdomTree WTI vs. WisdomTree Zinc | WisdomTree WTI vs. WisdomTree Brent Crude | WisdomTree WTI vs. WisdomTree Aluminium 2x | WisdomTree WTI 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |