Correlation Between WisdomTree Bitcoin and WisdomTree Physical
Can any of the company-specific risk be diversified away by investing in both WisdomTree Bitcoin and WisdomTree Physical 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 Bitcoin and WisdomTree Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Bitcoin and WisdomTree Physical Ethereum, you can compare the effects of market volatilities on WisdomTree Bitcoin and WisdomTree Physical 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 Bitcoin with a short position of WisdomTree Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Bitcoin and WisdomTree Physical.
Diversification Opportunities for WisdomTree Bitcoin and WisdomTree Physical
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between WisdomTree and WisdomTree is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Bitcoin and WisdomTree Physical Ethereum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Physical and WisdomTree Bitcoin 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 Bitcoin are associated (or correlated) with WisdomTree Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Physical has no effect on the direction of WisdomTree Bitcoin i.e., WisdomTree Bitcoin and WisdomTree Physical go up and down completely randomly.
Pair Corralation between WisdomTree Bitcoin and WisdomTree Physical
Assuming the 90 days trading horizon WisdomTree Bitcoin is expected to under-perform the WisdomTree Physical. But the etf apears to be less risky and, when comparing its historical volatility, WisdomTree Bitcoin is 1.46 times less risky than WisdomTree Physical. The etf trades about -0.04 of its potential returns per unit of risk. The WisdomTree Physical Ethereum is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,952 in WisdomTree Physical Ethereum on October 3, 2025 and sell it today you would lose (32.00) from holding WisdomTree Physical Ethereum or give up 1.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Bitcoin vs. WisdomTree Physical Ethereum
Performance |
| Timeline |
| WisdomTree Bitcoin |
| WisdomTree Physical |
WisdomTree Bitcoin and WisdomTree Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Bitcoin and WisdomTree Physical
The main advantage of trading using opposite WisdomTree Bitcoin and WisdomTree Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Bitcoin position performs unexpectedly, WisdomTree Physical 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 Physical will offset losses from the drop in WisdomTree Physical's long position.| WisdomTree Bitcoin vs. WisdomTree Physical Palladium | WisdomTree Bitcoin vs. WisdomTree Physical XRP | WisdomTree Bitcoin vs. WisdomTree Physical Platinum | WisdomTree Bitcoin vs. WisdomTree Physical Silver |
| WisdomTree Physical vs. Vanguard SP 500 | WisdomTree Physical vs. SPDR Dow Jones | WisdomTree Physical vs. iShares Core MSCI | WisdomTree Physical vs. iShares SP 500 |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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