Correlation Between WisdomTree and Capital Southwest
Can any of the company-specific risk be diversified away by investing in both WisdomTree and Capital Southwest 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 and Capital Southwest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree and Capital Southwest, you can compare the effects of market volatilities on WisdomTree and Capital Southwest 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 with a short position of Capital Southwest. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree and Capital Southwest.
Diversification Opportunities for WisdomTree and Capital Southwest
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WisdomTree and Capital is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree and Capital Southwest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Southwest and WisdomTree 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 are associated (or correlated) with Capital Southwest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Southwest has no effect on the direction of WisdomTree i.e., WisdomTree and Capital Southwest go up and down completely randomly.
Pair Corralation between WisdomTree and Capital Southwest
Allowing for the 90-day total investment horizon WisdomTree is expected to generate 1.9 times more return on investment than Capital Southwest. However, WisdomTree is 1.9 times more volatile than Capital Southwest. It trades about 0.33 of its potential returns per unit of risk. Capital Southwest is currently generating about 0.16 per unit of risk. If you would invest 1,101 in WisdomTree on November 24, 2025 and sell it today you would earn a total of 537.00 from holding WisdomTree or generate 48.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree vs. Capital Southwest
Performance |
| Timeline |
| WisdomTree |
| Capital Southwest |
WisdomTree and Capital Southwest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree and Capital Southwest
The main advantage of trading using opposite WisdomTree and Capital Southwest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree position performs unexpectedly, Capital Southwest 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 Capital Southwest will offset losses from the drop in Capital Southwest's long position.| WisdomTree vs. Acadian Asset Management | WisdomTree vs. Tri Continental Closed | WisdomTree vs. Grab Holdings | WisdomTree vs. Oxford Lane Capital |
| Capital Southwest vs. TON Strategy Co | Capital Southwest vs. CSLM Digital Asset | Capital Southwest vs. Mount Logan Capital | Capital Southwest vs. Streamex Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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