Correlation Between WisdomTree Interest and WisdomTree Yield
Can any of the company-specific risk be diversified away by investing in both WisdomTree Interest and WisdomTree Yield 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 Interest and WisdomTree Yield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Interest Rate and WisdomTree Yield Enhanced, you can compare the effects of market volatilities on WisdomTree Interest and WisdomTree Yield 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 Interest with a short position of WisdomTree Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Interest and WisdomTree Yield.
Diversification Opportunities for WisdomTree Interest and WisdomTree Yield
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WisdomTree and WisdomTree is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Interest Rate and WisdomTree Yield Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Yield Enhanced and WisdomTree Interest 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 Interest Rate are associated (or correlated) with WisdomTree Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Yield Enhanced has no effect on the direction of WisdomTree Interest i.e., WisdomTree Interest and WisdomTree Yield go up and down completely randomly.
Pair Corralation between WisdomTree Interest and WisdomTree Yield
Given the investment horizon of 90 days WisdomTree Interest Rate is expected to generate 2.61 times more return on investment than WisdomTree Yield. However, WisdomTree Interest is 2.61 times more volatile than WisdomTree Yield Enhanced. It trades about 0.12 of its potential returns per unit of risk. WisdomTree Yield Enhanced is currently generating about 0.25 per unit of risk. If you would invest 2,225 in WisdomTree Interest Rate on November 1, 2025 and sell it today you would earn a total of 30.00 from holding WisdomTree Interest Rate or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Interest Rate vs. WisdomTree Yield Enhanced
Performance |
| Timeline |
| WisdomTree Interest Rate |
| WisdomTree Yield Enhanced |
WisdomTree Interest and WisdomTree Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Interest and WisdomTree Yield
The main advantage of trading using opposite WisdomTree Interest and WisdomTree Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Interest position performs unexpectedly, WisdomTree Yield 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 Yield will offset losses from the drop in WisdomTree Yield's long position.| WisdomTree Interest vs. WisdomTree Yield Enhanced | WisdomTree Interest vs. Nuveen ESG High | WisdomTree Interest vs. Columbia Short Duration | WisdomTree Interest vs. iShares Inflation Hedged |
| WisdomTree Yield vs. WisdomTree Interest Rate | WisdomTree Yield vs. Brookstone Ultra Short Bond | WisdomTree Yield vs. Columbia Short Duration | WisdomTree Yield vs. Bondbloxx ETF Trust |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Stocks Directory Find actively traded stocks across global markets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |