Correlation Between WisdomTree Silver and WisdomTree Grains

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Can any of the company-specific risk be diversified away by investing in both WisdomTree Silver and WisdomTree Grains 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 Silver and WisdomTree Grains into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Silver 2x and WisdomTree Grains, you can compare the effects of market volatilities on WisdomTree Silver and WisdomTree Grains 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 Silver with a short position of WisdomTree Grains. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Silver and WisdomTree Grains.

Diversification Opportunities for WisdomTree Silver and WisdomTree Grains

-0.67
  Correlation Coefficient

Excellent diversification

The 3 months correlation between WisdomTree and WisdomTree is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Silver 2x and WisdomTree Grains in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Grains and WisdomTree Silver 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 Silver 2x are associated (or correlated) with WisdomTree Grains. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Grains has no effect on the direction of WisdomTree Silver i.e., WisdomTree Silver and WisdomTree Grains go up and down completely randomly.

Pair Corralation between WisdomTree Silver and WisdomTree Grains

Assuming the 90 days trading horizon WisdomTree Silver 2x is expected to generate 11.92 times more return on investment than WisdomTree Grains. However, WisdomTree Silver is 11.92 times more volatile than WisdomTree Grains. It trades about 0.19 of its potential returns per unit of risk. WisdomTree Grains is currently generating about -0.09 per unit of risk. If you would invest  1,406  in WisdomTree Silver 2x on November 5, 2025 and sell it today you would earn a total of  1,824  from holding WisdomTree Silver 2x or generate 129.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

WisdomTree Silver 2x  vs.  WisdomTree Grains

 Performance 
       Timeline  
WisdomTree Silver 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Silver 2x are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, WisdomTree Silver unveiled solid returns over the last few months and may actually be approaching a breakup point.
WisdomTree Grains 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days WisdomTree Grains has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, WisdomTree Grains is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

WisdomTree Silver and WisdomTree Grains Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with WisdomTree Silver and WisdomTree Grains

The main advantage of trading using opposite WisdomTree Silver and WisdomTree Grains positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Silver position performs unexpectedly, WisdomTree Grains 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 Grains will offset losses from the drop in WisdomTree Grains' long position.
The idea behind WisdomTree Silver 2x and WisdomTree Grains pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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