Correlation Between WisdomTree Gold and WisdomTree Energy
Can any of the company-specific risk be diversified away by investing in both WisdomTree Gold and WisdomTree Energy 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 Gold and WisdomTree Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Gold 2x and WisdomTree Energy Longer, you can compare the effects of market volatilities on WisdomTree Gold and WisdomTree Energy 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 Gold with a short position of WisdomTree Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Gold and WisdomTree Energy.
Diversification Opportunities for WisdomTree Gold and WisdomTree Energy
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between WisdomTree and WisdomTree is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Gold 2x and WisdomTree Energy Longer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Energy Longer and WisdomTree 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 WisdomTree Gold 2x are associated (or correlated) with WisdomTree Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Energy Longer has no effect on the direction of WisdomTree Gold i.e., WisdomTree Gold and WisdomTree Energy go up and down completely randomly.
Pair Corralation between WisdomTree Gold and WisdomTree Energy
Assuming the 90 days trading horizon WisdomTree Gold 2x is expected to generate 1.98 times more return on investment than WisdomTree Energy. However, WisdomTree Gold is 1.98 times more volatile than WisdomTree Energy Longer. It trades about 0.36 of its potential returns per unit of risk. WisdomTree Energy Longer is currently generating about 0.04 per unit of risk. If you would invest 18,556 in WisdomTree Gold 2x on November 1, 2025 and sell it today you would earn a total of 12,549 from holding WisdomTree Gold 2x or generate 67.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Gold 2x vs. WisdomTree Energy Longer
Performance |
| Timeline |
| WisdomTree Gold 2x |
| WisdomTree Energy Longer |
WisdomTree Gold and WisdomTree Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Gold and WisdomTree Energy
The main advantage of trading using opposite WisdomTree Gold and WisdomTree Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Gold position performs unexpectedly, WisdomTree Energy 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 Energy will offset losses from the drop in WisdomTree Energy's long position.| WisdomTree Gold vs. WisdomTree Zinc | WisdomTree Gold vs. WisdomTree Brent Crude | WisdomTree Gold vs. WisdomTree Aluminium 2x | WisdomTree Gold vs. WisdomTree Enhanced Commodity |
| WisdomTree Energy vs. WisdomTree Zinc | WisdomTree Energy vs. WisdomTree Brent Crude | WisdomTree Energy vs. WisdomTree Aluminium 2x | WisdomTree Energy vs. WisdomTree Enhanced Commodity |
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 CEOs Directory module to screen CEOs from public companies around the world.
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