Correlation Between DB Gold and WisdomTree SmallCap
Can any of the company-specific risk be diversified away by investing in both DB Gold and WisdomTree SmallCap 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 DB Gold and WisdomTree SmallCap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DB Gold Double and WisdomTree SmallCap Earnings, you can compare the effects of market volatilities on DB Gold and WisdomTree SmallCap 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 DB Gold with a short position of WisdomTree SmallCap. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Gold and WisdomTree SmallCap.
Diversification Opportunities for DB Gold and WisdomTree SmallCap
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between DGP and WisdomTree is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding DB Gold Double and WisdomTree SmallCap Earnings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree SmallCap and DB Gold 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 DB Gold Double are associated (or correlated) with WisdomTree SmallCap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree SmallCap has no effect on the direction of DB Gold i.e., DB Gold and WisdomTree SmallCap go up and down completely randomly.
Pair Corralation between DB Gold and WisdomTree SmallCap
Considering the 90-day investment horizon DB Gold Double is expected to generate 4.01 times more return on investment than WisdomTree SmallCap. However, DB Gold is 4.01 times more volatile than WisdomTree SmallCap Earnings. It trades about 0.17 of its potential returns per unit of risk. WisdomTree SmallCap Earnings is currently generating about 0.23 per unit of risk. If you would invest 14,533 in DB Gold Double on November 20, 2025 and sell it today you would earn a total of 6,787 from holding DB Gold Double or generate 46.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB Gold Double vs. WisdomTree SmallCap Earnings
Performance |
| Timeline |
| DB Gold Double |
| WisdomTree SmallCap |
DB Gold and WisdomTree SmallCap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Gold and WisdomTree SmallCap
The main advantage of trading using opposite DB Gold and WisdomTree SmallCap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Gold position performs unexpectedly, WisdomTree SmallCap 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 SmallCap will offset losses from the drop in WisdomTree SmallCap's long position.| DB Gold vs. Invesco DB Precious | DB Gold vs. United States Copper | DB Gold vs. Innovator SP 500 | DB Gold vs. SGI Enhanced Market |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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