Correlation Between WisdomTree Trust and WisdomTree SmallCap
Can any of the company-specific risk be diversified away by investing in both WisdomTree Trust 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 WisdomTree Trust and WisdomTree SmallCap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Trust and WisdomTree SmallCap Dividend, you can compare the effects of market volatilities on WisdomTree Trust 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 WisdomTree Trust with a short position of WisdomTree SmallCap. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Trust and WisdomTree SmallCap.
Diversification Opportunities for WisdomTree Trust and WisdomTree SmallCap
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between WisdomTree and WisdomTree is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Trust and WisdomTree SmallCap Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree SmallCap and WisdomTree Trust 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 Trust 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 WisdomTree Trust i.e., WisdomTree Trust and WisdomTree SmallCap go up and down completely randomly.
Pair Corralation between WisdomTree Trust and WisdomTree SmallCap
Given the investment horizon of 90 days WisdomTree Trust is expected to under-perform the WisdomTree SmallCap. In addition to that, WisdomTree Trust is 1.0 times more volatile than WisdomTree SmallCap Dividend. It trades about -0.06 of its total potential returns per unit of risk. WisdomTree SmallCap Dividend is currently generating about 0.21 per unit of volatility. If you would invest 3,280 in WisdomTree SmallCap Dividend on November 9, 2025 and sell it today you would earn a total of 485.00 from holding WisdomTree SmallCap Dividend or generate 14.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Trust vs. WisdomTree SmallCap Dividend
Performance |
| Timeline |
| WisdomTree Trust |
| WisdomTree SmallCap |
WisdomTree Trust and WisdomTree SmallCap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Trust and WisdomTree SmallCap
The main advantage of trading using opposite WisdomTree Trust and WisdomTree SmallCap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Trust 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.| WisdomTree Trust vs. Nuveen ESG Large Cap | WisdomTree Trust vs. TCW ETF Trust | WisdomTree Trust vs. FlexShares Morningstar Market | WisdomTree Trust vs. SPDR SP Semiconductor |
| WisdomTree SmallCap vs. WisdomTree Emerging Markets | WisdomTree SmallCap vs. WisdomTree Europe Hedged | WisdomTree SmallCap vs. iShares Global Energy | WisdomTree SmallCap vs. iShares Financial Services |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |