Correlation Between WisdomTree SmallCap and Firsthand Alternative
Can any of the company-specific risk be diversified away by investing in both WisdomTree SmallCap and Firsthand Alternative 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 SmallCap and Firsthand Alternative into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree SmallCap Quality and Firsthand Alternative Energy, you can compare the effects of market volatilities on WisdomTree SmallCap and Firsthand Alternative 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 SmallCap with a short position of Firsthand Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree SmallCap and Firsthand Alternative.
Diversification Opportunities for WisdomTree SmallCap and Firsthand Alternative
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WisdomTree and Firsthand is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree SmallCap Quality and Firsthand Alternative Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firsthand Alternative and WisdomTree SmallCap 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 SmallCap Quality are associated (or correlated) with Firsthand Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firsthand Alternative has no effect on the direction of WisdomTree SmallCap i.e., WisdomTree SmallCap and Firsthand Alternative go up and down completely randomly.
Pair Corralation between WisdomTree SmallCap and Firsthand Alternative
Given the investment horizon of 90 days WisdomTree SmallCap is expected to generate 1.22 times less return on investment than Firsthand Alternative. But when comparing it to its historical volatility, WisdomTree SmallCap Quality is 2.26 times less risky than Firsthand Alternative. It trades about 0.08 of its potential returns per unit of risk. Firsthand Alternative Energy is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 942.00 in Firsthand Alternative Energy on September 29, 2025 and sell it today you would earn a total of 96.00 from holding Firsthand Alternative Energy or generate 10.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree SmallCap Quality vs. Firsthand Alternative Energy
Performance |
| Timeline |
| WisdomTree SmallCap |
| Firsthand Alternative |
WisdomTree SmallCap and Firsthand Alternative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree SmallCap and Firsthand Alternative
The main advantage of trading using opposite WisdomTree SmallCap and Firsthand Alternative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree SmallCap position performs unexpectedly, Firsthand Alternative 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 Firsthand Alternative will offset losses from the drop in Firsthand Alternative's long position.| WisdomTree SmallCap vs. Lsv Global Managed | WisdomTree SmallCap vs. Guinness Atkinson Global | WisdomTree SmallCap vs. Fidelity Sustainable Emerging | WisdomTree SmallCap vs. Fidelity Fund Fidelity |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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