Correlation Between WisdomTree Wheat and WisdomTree Natural
Can any of the company-specific risk be diversified away by investing in both WisdomTree Wheat and WisdomTree Natural 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 Wheat and WisdomTree Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Wheat EUR and WisdomTree Natural Gas, you can compare the effects of market volatilities on WisdomTree Wheat and WisdomTree Natural 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 Wheat with a short position of WisdomTree Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Wheat and WisdomTree Natural.
Diversification Opportunities for WisdomTree Wheat and WisdomTree Natural
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WisdomTree and WisdomTree is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Wheat EUR and WisdomTree Natural Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Natural Gas and WisdomTree Wheat 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 Wheat EUR are associated (or correlated) with WisdomTree Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Natural Gas has no effect on the direction of WisdomTree Wheat i.e., WisdomTree Wheat and WisdomTree Natural go up and down completely randomly.
Pair Corralation between WisdomTree Wheat and WisdomTree Natural
Assuming the 90 days trading horizon WisdomTree Wheat EUR is expected to generate 0.21 times more return on investment than WisdomTree Natural. However, WisdomTree Wheat EUR is 4.75 times less risky than WisdomTree Natural. It trades about -0.08 of its potential returns per unit of risk. WisdomTree Natural Gas is currently generating about -0.03 per unit of risk. If you would invest 1,588 in WisdomTree Wheat EUR on November 12, 2025 and sell it today you would lose (90.00) from holding WisdomTree Wheat EUR or give up 5.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Wheat EUR vs. WisdomTree Natural Gas
Performance |
| Timeline |
| WisdomTree Wheat EUR |
| WisdomTree Natural Gas |
WisdomTree Wheat and WisdomTree Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Wheat and WisdomTree Natural
The main advantage of trading using opposite WisdomTree Wheat and WisdomTree Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Wheat position performs unexpectedly, WisdomTree Natural 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 Natural will offset losses from the drop in WisdomTree Natural's long position.| WisdomTree Wheat vs. WisdomTree Physical Bitcoin | WisdomTree Wheat vs. WisdomTree Gold EUR | WisdomTree Wheat vs. WisdomTree Physical Cardano | WisdomTree Wheat vs. WisdomTree Physical Polkadot |
| WisdomTree Natural vs. WisdomTree Wheat EUR | WisdomTree Natural vs. WisdomTree Physical Bitcoin | WisdomTree Natural vs. WisdomTree Gold EUR | WisdomTree Natural vs. WisdomTree Physical Cardano |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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