Correlation Between WisdomTree Broad and WisdomTree WTI
Can any of the company-specific risk be diversified away by investing in both WisdomTree Broad 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 Broad 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 Broad Commodities and WisdomTree WTI Crude, you can compare the effects of market volatilities on WisdomTree Broad 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 Broad with a short position of WisdomTree WTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Broad and WisdomTree WTI.
Diversification Opportunities for WisdomTree Broad and WisdomTree WTI
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WisdomTree and WisdomTree is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Broad Commodities 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 Broad 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 Broad Commodities 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 Broad i.e., WisdomTree Broad and WisdomTree WTI go up and down completely randomly.
Pair Corralation between WisdomTree Broad and WisdomTree WTI
Assuming the 90 days trading horizon WisdomTree Broad is expected to generate 1.87 times less return on investment than WisdomTree WTI. But when comparing it to its historical volatility, WisdomTree Broad Commodities is 2.99 times less risky than WisdomTree WTI. It trades about 0.11 of its potential returns per unit of risk. WisdomTree WTI Crude is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 877.00 in WisdomTree WTI Crude on November 20, 2025 and sell it today you would earn a total of 104.00 from holding WisdomTree WTI Crude or generate 11.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
WisdomTree Broad Commodities vs. WisdomTree WTI Crude
Performance |
| Timeline |
| WisdomTree Broad Com |
| WisdomTree WTI Crude |
WisdomTree Broad and WisdomTree WTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Broad and WisdomTree WTI
The main advantage of trading using opposite WisdomTree Broad and WisdomTree WTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Broad 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 Broad vs. Vanguard FTSE Developed | WisdomTree Broad vs. Leverage Shares 2x | WisdomTree Broad vs. Amundi Index Solutions | WisdomTree Broad 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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