Correlation Between WisdomTree and Prospect Capital
Can any of the company-specific risk be diversified away by investing in both WisdomTree and Prospect Capital 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 Prospect Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree and Prospect Capital, you can compare the effects of market volatilities on WisdomTree and Prospect Capital 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 Prospect Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree and Prospect Capital.
Diversification Opportunities for WisdomTree and Prospect Capital
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WisdomTree and Prospect is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree and Prospect Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prospect Capital 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 Prospect Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prospect Capital has no effect on the direction of WisdomTree i.e., WisdomTree and Prospect Capital go up and down completely randomly.
Pair Corralation between WisdomTree and Prospect Capital
Allowing for the 90-day total investment horizon WisdomTree is expected to generate 0.86 times more return on investment than Prospect Capital. However, WisdomTree is 1.16 times less risky than Prospect Capital. It trades about 0.34 of its potential returns per unit of risk. Prospect Capital is currently generating about 0.12 per unit of risk. If you would invest 1,101 in WisdomTree on November 22, 2025 and sell it today you would earn a total of 546.00 from holding WisdomTree or generate 49.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.33% |
| Values | Daily Returns |
WisdomTree vs. Prospect Capital
Performance |
| Timeline |
| WisdomTree |
| Prospect Capital |
WisdomTree and Prospect Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree and Prospect Capital
The main advantage of trading using opposite WisdomTree and Prospect Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree position performs unexpectedly, Prospect Capital 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 Prospect Capital will offset losses from the drop in Prospect Capital's long position.| WisdomTree vs. Acadian Asset Management | WisdomTree vs. Tri Continental Closed | WisdomTree vs. Grab Holdings | WisdomTree vs. Oxford Lane Capital |
| Prospect Capital vs. TON Strategy Co | Prospect Capital vs. CSLM Digital Asset | Prospect Capital vs. Mount Logan Capital | Prospect Capital 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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