Correlation Between WisdomTree SmallCap and WisdomTree Trust
Can any of the company-specific risk be diversified away by investing in both WisdomTree SmallCap and WisdomTree Trust 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 WisdomTree Trust 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 WisdomTree Trust , you can compare the effects of market volatilities on WisdomTree SmallCap and WisdomTree Trust 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 WisdomTree Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree SmallCap and WisdomTree Trust.
Diversification Opportunities for WisdomTree SmallCap and WisdomTree Trust
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between WisdomTree and WisdomTree is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree SmallCap Dividend and WisdomTree Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Trust 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 WisdomTree Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Trust has no effect on the direction of WisdomTree SmallCap i.e., WisdomTree SmallCap and WisdomTree Trust go up and down completely randomly.
Pair Corralation between WisdomTree SmallCap and WisdomTree Trust
Considering the 90-day investment horizon WisdomTree SmallCap Dividend is expected to generate 0.76 times more return on investment than WisdomTree Trust. However, WisdomTree SmallCap Dividend is 1.32 times less risky than WisdomTree Trust. It trades about 0.08 of its potential returns per unit of risk. WisdomTree Trust is currently generating about 0.03 per unit of risk. If you would invest 3,334 in WisdomTree SmallCap Dividend on October 2, 2025 and sell it today you would earn a total of 36.00 from holding WisdomTree SmallCap Dividend or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree SmallCap Dividend vs. WisdomTree Trust
Performance |
| Timeline |
| WisdomTree SmallCap |
| WisdomTree Trust |
WisdomTree SmallCap and WisdomTree Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree SmallCap and WisdomTree Trust
The main advantage of trading using opposite WisdomTree SmallCap and WisdomTree Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree SmallCap position performs unexpectedly, WisdomTree Trust 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 Trust will offset losses from the drop in WisdomTree Trust'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 |
| WisdomTree Trust vs. Nuveen ESG Large Cap | WisdomTree Trust vs. TCW ETF Trust | WisdomTree Trust vs. FlexShares Morningstar Market | WisdomTree Trust vs. SPDR SP Semiconductor |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |