Correlation Between WisdomTree Enhanced and WisdomTree Broad
Can any of the company-specific risk be diversified away by investing in both WisdomTree Enhanced and WisdomTree Broad 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 Enhanced and WisdomTree Broad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Enhanced Commodity and WisdomTree Broad Commodities, you can compare the effects of market volatilities on WisdomTree Enhanced and WisdomTree Broad 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 Enhanced with a short position of WisdomTree Broad. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Enhanced and WisdomTree Broad.
Diversification Opportunities for WisdomTree Enhanced and WisdomTree Broad
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WisdomTree and WisdomTree is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Enhanced Commodity and WisdomTree Broad Commodities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Broad Com and WisdomTree Enhanced 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 Enhanced Commodity are associated (or correlated) with WisdomTree Broad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Broad Com has no effect on the direction of WisdomTree Enhanced i.e., WisdomTree Enhanced and WisdomTree Broad go up and down completely randomly.
Pair Corralation between WisdomTree Enhanced and WisdomTree Broad
Assuming the 90 days trading horizon WisdomTree Enhanced Commodity is expected to generate 0.97 times more return on investment than WisdomTree Broad. However, WisdomTree Enhanced Commodity is 1.03 times less risky than WisdomTree Broad. It trades about 0.32 of its potential returns per unit of risk. WisdomTree Broad Commodities is currently generating about 0.31 per unit of risk. If you would invest 105,256 in WisdomTree Enhanced Commodity on October 23, 2025 and sell it today you would earn a total of 6,594 from holding WisdomTree Enhanced Commodity or generate 6.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Enhanced Commodity vs. WisdomTree Broad Commodities
Performance |
| Timeline |
| WisdomTree Enhanced |
| WisdomTree Broad Com |
WisdomTree Enhanced and WisdomTree Broad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Enhanced and WisdomTree Broad
The main advantage of trading using opposite WisdomTree Enhanced and WisdomTree Broad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Enhanced position performs unexpectedly, WisdomTree Broad 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 Broad will offset losses from the drop in WisdomTree Broad's long position.| WisdomTree Enhanced vs. WisdomTree Zinc | WisdomTree Enhanced vs. WisdomTree Brent Crude | WisdomTree Enhanced vs. WisdomTree Aluminium 2x | WisdomTree Enhanced vs. WisdomTree Gold 3x |
| WisdomTree Broad vs. WisdomTree Zinc | WisdomTree Broad vs. WisdomTree Brent Crude | WisdomTree Broad vs. WisdomTree Aluminium 2x | WisdomTree Broad vs. WisdomTree Enhanced Commodity |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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