Correlation Between WisdomTree Global and WisdomTree Inflation
Can any of the company-specific risk be diversified away by investing in both WisdomTree Global and WisdomTree Inflation 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 Global and WisdomTree Inflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Global Defense and WisdomTree Inflation Plus, you can compare the effects of market volatilities on WisdomTree Global and WisdomTree Inflation 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 Global with a short position of WisdomTree Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Global and WisdomTree Inflation.
Diversification Opportunities for WisdomTree Global and WisdomTree Inflation
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WisdomTree and WisdomTree is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Global Defense and WisdomTree Inflation Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Inflation Plus and WisdomTree Global 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 Global Defense are associated (or correlated) with WisdomTree Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Inflation Plus has no effect on the direction of WisdomTree Global i.e., WisdomTree Global and WisdomTree Inflation go up and down completely randomly.
Pair Corralation between WisdomTree Global and WisdomTree Inflation
Given the investment horizon of 90 days WisdomTree Global Defense is expected to generate 1.07 times more return on investment than WisdomTree Inflation. However, WisdomTree Global is 1.07 times more volatile than WisdomTree Inflation Plus. It trades about 0.68 of its potential returns per unit of risk. WisdomTree Inflation Plus is currently generating about 0.1 per unit of risk. If you would invest 3,046 in WisdomTree Global Defense on October 20, 2025 and sell it today you would earn a total of 537.00 from holding WisdomTree Global Defense or generate 17.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Global Defense vs. WisdomTree Inflation Plus
Performance |
| Timeline |
| WisdomTree Global Defense |
| WisdomTree Inflation Plus |
WisdomTree Global and WisdomTree Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Global and WisdomTree Inflation
The main advantage of trading using opposite WisdomTree Global and WisdomTree Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Global position performs unexpectedly, WisdomTree Inflation 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 Inflation will offset losses from the drop in WisdomTree Inflation's long position.| WisdomTree Global vs. Tidal Trust II | WisdomTree Global vs. Innovator ETFs Trust | WisdomTree Global vs. YieldMax Target 12 | WisdomTree Global vs. Hotchkis Wiley SMID |
| WisdomTree Inflation vs. WisdomTree MidCap Quality | WisdomTree Inflation vs. Litman Gregory Funds | WisdomTree Inflation vs. Tidal Trust II | WisdomTree Inflation vs. Tidal Trust II |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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