Correlation Between WisdomTree Continuous and Invesco DB
Can any of the company-specific risk be diversified away by investing in both WisdomTree Continuous and Invesco DB 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 Continuous and Invesco DB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Continuous Commodity and Invesco DB Dollar, you can compare the effects of market volatilities on WisdomTree Continuous and Invesco DB 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 Continuous with a short position of Invesco DB. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Continuous and Invesco DB.
Diversification Opportunities for WisdomTree Continuous and Invesco DB
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WisdomTree and Invesco is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Continuous Commodit and Invesco DB Dollar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco DB Dollar and WisdomTree Continuous 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 Continuous Commodity are associated (or correlated) with Invesco DB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco DB Dollar has no effect on the direction of WisdomTree Continuous i.e., WisdomTree Continuous and Invesco DB go up and down completely randomly.
Pair Corralation between WisdomTree Continuous and Invesco DB
Considering the 90-day investment horizon WisdomTree Continuous Commodity is expected to generate 5.9 times more return on investment than Invesco DB. However, WisdomTree Continuous is 5.9 times more volatile than Invesco DB Dollar. It trades about 0.29 of its potential returns per unit of risk. Invesco DB Dollar is currently generating about -0.2 per unit of risk. If you would invest 2,067 in WisdomTree Continuous Commodity on October 14, 2025 and sell it today you would earn a total of 128.00 from holding WisdomTree Continuous Commodity or generate 6.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Continuous Commodit vs. Invesco DB Dollar
Performance |
| Timeline |
| WisdomTree Continuous |
| Invesco DB Dollar |
WisdomTree Continuous and Invesco DB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Continuous and Invesco DB
The main advantage of trading using opposite WisdomTree Continuous and Invesco DB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Continuous position performs unexpectedly, Invesco DB 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 Invesco DB will offset losses from the drop in Invesco DB's long position.| WisdomTree Continuous vs. VanEck Natural Resources | WisdomTree Continuous vs. Direxion Auspice Broad | WisdomTree Continuous vs. Ballast SmallMid Cap | WisdomTree Continuous vs. AIM ETF Products |
| Invesco DB vs. Invesco DB Dollar | Invesco DB vs. WisdomTree Bloomberg Dollar | Invesco DB vs. ProShares UltraShort Bloomberg | Invesco DB vs. 1x Short VIX |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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