Correlation Between WisdomTree Gold and WisdomTree Platinum
Can any of the company-specific risk be diversified away by investing in both WisdomTree Gold and WisdomTree Platinum 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 Platinum 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 Platinum 2x, you can compare the effects of market volatilities on WisdomTree Gold and WisdomTree Platinum 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 Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Gold and WisdomTree Platinum.
Diversification Opportunities for WisdomTree Gold and WisdomTree Platinum
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WisdomTree and WisdomTree is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Gold 3x and WisdomTree Platinum 2x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Platinum 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 Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Platinum has no effect on the direction of WisdomTree Gold i.e., WisdomTree Gold and WisdomTree Platinum go up and down completely randomly.
Pair Corralation between WisdomTree Gold and WisdomTree Platinum
Assuming the 90 days trading horizon WisdomTree Gold is expected to generate 3.49 times less return on investment than WisdomTree Platinum. But when comparing it to its historical volatility, WisdomTree Gold 3x is 2.29 times less risky than WisdomTree Platinum. It trades about 0.49 of its potential returns per unit of risk. WisdomTree Platinum 2x is currently generating about 0.75 of returns per unit of risk over similar time horizon. If you would invest 401.00 in WisdomTree Platinum 2x on September 28, 2025 and sell it today you would earn a total of 412.00 from holding WisdomTree Platinum 2x or generate 102.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Gold 3x vs. WisdomTree Platinum 2x
Performance |
| Timeline |
| WisdomTree Gold 3x |
| WisdomTree Platinum |
WisdomTree Gold and WisdomTree Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Gold and WisdomTree Platinum
The main advantage of trading using opposite WisdomTree Gold and WisdomTree Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Gold position performs unexpectedly, WisdomTree Platinum 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 Platinum will offset losses from the drop in WisdomTree Platinum's long position.| WisdomTree Gold vs. WisdomTree NASDAQ 100 | WisdomTree Gold vs. WisdomTree NASDAQ 100 | WisdomTree Gold vs. WisdomTree Gold 3x | WisdomTree Gold vs. WisdomTree SP 500 |
| WisdomTree Platinum vs. WisdomTree NASDAQ 100 | WisdomTree Platinum vs. WisdomTree NASDAQ 100 | WisdomTree Platinum vs. WisdomTree Gold 3x | WisdomTree Platinum vs. WisdomTree Gold 3x |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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