Correlation Between Consumer Goods and WisdomTree Global
Can any of the company-specific risk be diversified away by investing in both Consumer Goods and WisdomTree Global 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 Consumer Goods and WisdomTree Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consumer Goods Ultrasector and WisdomTree Global Defense, you can compare the effects of market volatilities on Consumer Goods and WisdomTree Global 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 Consumer Goods with a short position of WisdomTree Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consumer Goods and WisdomTree Global.
Diversification Opportunities for Consumer Goods and WisdomTree Global
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Consumer and WisdomTree is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Consumer Goods Ultrasector and WisdomTree Global Defense in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Global Defense and Consumer Goods 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 Consumer Goods Ultrasector are associated (or correlated) with WisdomTree Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Global Defense has no effect on the direction of Consumer Goods i.e., Consumer Goods and WisdomTree Global go up and down completely randomly.
Pair Corralation between Consumer Goods and WisdomTree Global
Assuming the 90 days horizon Consumer Goods is expected to generate 3.26 times less return on investment than WisdomTree Global. In addition to that, Consumer Goods is 1.03 times more volatile than WisdomTree Global Defense. It trades about 0.23 of its total potential returns per unit of risk. WisdomTree Global Defense is currently generating about 0.77 per unit of volatility. If you would invest 2,937 in WisdomTree Global Defense on October 18, 2025 and sell it today you would earn a total of 614.00 from holding WisdomTree Global Defense or generate 20.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Consumer Goods Ultrasector vs. WisdomTree Global Defense
Performance |
| Timeline |
| Consumer Goods Ultra |
| WisdomTree Global Defense |
Consumer Goods and WisdomTree Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consumer Goods and WisdomTree Global
The main advantage of trading using opposite Consumer Goods and WisdomTree Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consumer Goods position performs unexpectedly, WisdomTree Global 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 Global will offset losses from the drop in WisdomTree Global's long position.| Consumer Goods vs. Sp Smallcap 600 | Consumer Goods vs. Energy Services Fund | Consumer Goods vs. The RBB Fund | Consumer Goods vs. Mississippi Tax Free Income |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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