Correlation Between Trinity Capital and WisdomTree
Can any of the company-specific risk be diversified away by investing in both Trinity Capital and WisdomTree 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 Trinity Capital and WisdomTree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trinity Capital and WisdomTree, you can compare the effects of market volatilities on Trinity Capital and WisdomTree 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 Trinity Capital with a short position of WisdomTree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trinity Capital and WisdomTree.
Diversification Opportunities for Trinity Capital and WisdomTree
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Trinity and WisdomTree is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Trinity Capital and WisdomTree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree and Trinity Capital 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 Trinity Capital are associated (or correlated) with WisdomTree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree has no effect on the direction of Trinity Capital i.e., Trinity Capital and WisdomTree go up and down completely randomly.
Pair Corralation between Trinity Capital and WisdomTree
Given the investment horizon of 90 days Trinity Capital is expected to generate 2.2 times less return on investment than WisdomTree. But when comparing it to its historical volatility, Trinity Capital is 1.69 times less risky than WisdomTree. It trades about 0.19 of its potential returns per unit of risk. WisdomTree is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,155 in WisdomTree on November 7, 2025 and sell it today you would earn a total of 395.00 from holding WisdomTree or generate 34.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trinity Capital vs. WisdomTree
Performance |
| Timeline |
| Trinity Capital |
| WisdomTree |
Trinity Capital and WisdomTree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trinity Capital and WisdomTree
The main advantage of trading using opposite Trinity Capital and WisdomTree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trinity Capital position performs unexpectedly, WisdomTree 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 will offset losses from the drop in WisdomTree's long position.| Trinity Capital vs. Source Capital Closed | Trinity Capital vs. GigCapital7 Corp Class | Trinity Capital vs. Saratoga Investment Corp | Trinity Capital vs. PennantPark Investment |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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