Correlation Between SWP Growth and WisdomTree Earnings
Can any of the company-specific risk be diversified away by investing in both SWP Growth and WisdomTree Earnings 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 SWP Growth and WisdomTree Earnings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SWP Growth Income and WisdomTree Earnings 500, you can compare the effects of market volatilities on SWP Growth and WisdomTree Earnings 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 SWP Growth with a short position of WisdomTree Earnings. Check out your portfolio center. Please also check ongoing floating volatility patterns of SWP Growth and WisdomTree Earnings.
Diversification Opportunities for SWP Growth and WisdomTree Earnings
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SWP and WisdomTree is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding SWP Growth Income and WisdomTree Earnings 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Earnings 500 and SWP Growth 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 SWP Growth Income are associated (or correlated) with WisdomTree Earnings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Earnings 500 has no effect on the direction of SWP Growth i.e., SWP Growth and WisdomTree Earnings go up and down completely randomly.
Pair Corralation between SWP Growth and WisdomTree Earnings
Considering the 90-day investment horizon SWP Growth Income is expected to generate 1.11 times more return on investment than WisdomTree Earnings. However, SWP Growth is 1.11 times more volatile than WisdomTree Earnings 500. It trades about 0.1 of its potential returns per unit of risk. WisdomTree Earnings 500 is currently generating about 0.06 per unit of risk. If you would invest 2,726 in SWP Growth Income on November 7, 2025 and sell it today you would earn a total of 119.72 from holding SWP Growth Income or generate 4.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SWP Growth Income vs. WisdomTree Earnings 500
Performance |
| Timeline |
| SWP Growth Income |
| WisdomTree Earnings 500 |
SWP Growth and WisdomTree Earnings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SWP Growth and WisdomTree Earnings
The main advantage of trading using opposite SWP Growth and WisdomTree Earnings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SWP Growth position performs unexpectedly, WisdomTree Earnings 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 Earnings will offset losses from the drop in WisdomTree Earnings' long position.| SWP Growth vs. FT Vest Equity | SWP Growth vs. Northern Lights | SWP Growth vs. Diamond Hill Funds | SWP Growth vs. Dimensional International High |
| WisdomTree Earnings vs. WisdomTree High Dividend | WisdomTree Earnings vs. iShares Consumer Staples | WisdomTree Earnings vs. iShares MSCI Switzerland | WisdomTree Earnings vs. Direxion NASDAQ 100 Equal |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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