Correlation Between WisdomTree SmallCap and Core Alternative
Can any of the company-specific risk be diversified away by investing in both WisdomTree SmallCap and Core Alternative 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 SmallCap and Core Alternative into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree SmallCap Dividend and Core Alternative ETF, you can compare the effects of market volatilities on WisdomTree SmallCap and Core Alternative 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 SmallCap with a short position of Core Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree SmallCap and Core Alternative.
Diversification Opportunities for WisdomTree SmallCap and Core Alternative
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WisdomTree and Core is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree SmallCap Dividend and Core Alternative ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Alternative ETF and WisdomTree SmallCap 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 SmallCap Dividend are associated (or correlated) with Core Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Alternative ETF has no effect on the direction of WisdomTree SmallCap i.e., WisdomTree SmallCap and Core Alternative go up and down completely randomly.
Pair Corralation between WisdomTree SmallCap and Core Alternative
Considering the 90-day investment horizon WisdomTree SmallCap Dividend is expected to generate 2.31 times more return on investment than Core Alternative. However, WisdomTree SmallCap is 2.31 times more volatile than Core Alternative ETF. It trades about 0.19 of its potential returns per unit of risk. Core Alternative ETF is currently generating about 0.08 per unit of risk. If you would invest 3,341 in WisdomTree SmallCap Dividend on November 28, 2025 and sell it today you would earn a total of 408.79 from holding WisdomTree SmallCap Dividend or generate 12.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree SmallCap Dividend vs. Core Alternative ETF
Performance |
| Timeline |
| WisdomTree SmallCap |
| Core Alternative ETF |
WisdomTree SmallCap and Core Alternative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree SmallCap and Core Alternative
The main advantage of trading using opposite WisdomTree SmallCap and Core Alternative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree SmallCap position performs unexpectedly, Core Alternative 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 Core Alternative will offset losses from the drop in Core Alternative's long position.| WisdomTree SmallCap vs. WisdomTree Emerging Markets | WisdomTree SmallCap vs. WisdomTree Europe Hedged | WisdomTree SmallCap vs. iShares Global Energy | WisdomTree SmallCap vs. iShares Financial Services |
| Core Alternative vs. Saba Closed End Funds | Core Alternative vs. First Trust Exchange Traded | Core Alternative vs. TCW ETF Trust | Core Alternative vs. AIM ETF Products |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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