Correlation Between WisdomTree Ethereum and CoinShares Physical
Can any of the company-specific risk be diversified away by investing in both WisdomTree Ethereum and CoinShares 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 Ethereum and CoinShares Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Ethereum ETC and CoinShares Physical XRP, you can compare the effects of market volatilities on WisdomTree Ethereum and CoinShares 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 Ethereum with a short position of CoinShares Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Ethereum and CoinShares Physical.
Diversification Opportunities for WisdomTree Ethereum and CoinShares Physical
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WisdomTree and CoinShares is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Ethereum ETC and CoinShares Physical XRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoinShares Physical XRP and WisdomTree Ethereum 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 Ethereum ETC are associated (or correlated) with CoinShares Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoinShares Physical XRP has no effect on the direction of WisdomTree Ethereum i.e., WisdomTree Ethereum and CoinShares Physical go up and down completely randomly.
Pair Corralation between WisdomTree Ethereum and CoinShares Physical
Assuming the 90 days trading horizon WisdomTree Ethereum ETC is expected to under-perform the CoinShares Physical. But the etf apears to be less risky and, when comparing its historical volatility, WisdomTree Ethereum ETC is 1.07 times less risky than CoinShares Physical. The etf trades about -0.16 of its potential returns per unit of risk. The CoinShares Physical XRP is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 7,346 in CoinShares Physical XRP on November 6, 2025 and sell it today you would lose (2,714) from holding CoinShares Physical XRP or give up 36.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.31% |
| Values | Daily Returns |
WisdomTree Ethereum ETC vs. CoinShares Physical XRP
Performance |
| Timeline |
| WisdomTree Ethereum ETC |
| CoinShares Physical XRP |
Risk-Adjusted Performance
Weakest
Weak | Strong |
WisdomTree Ethereum and CoinShares Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Ethereum and CoinShares Physical
The main advantage of trading using opposite WisdomTree Ethereum and CoinShares Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Ethereum position performs unexpectedly, CoinShares 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 CoinShares Physical will offset losses from the drop in CoinShares Physical's long position.| WisdomTree Ethereum vs. iShares MSCI Japan | WisdomTree Ethereum vs. iShares Corp Bond | WisdomTree Ethereum vs. iShares Global High | WisdomTree Ethereum vs. SPDR MSCI Europe |
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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