Correlation Between WisdomTree Inflation and Invesco Next
Can any of the company-specific risk be diversified away by investing in both WisdomTree Inflation and Invesco Next 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 Inflation and Invesco Next into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Inflation Plus and Invesco Next Gen, you can compare the effects of market volatilities on WisdomTree Inflation and Invesco Next 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 Inflation with a short position of Invesco Next. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Inflation and Invesco Next.
Diversification Opportunities for WisdomTree Inflation and Invesco Next
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WisdomTree and Invesco is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Inflation Plus and Invesco Next Gen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Next Gen and WisdomTree Inflation 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 Inflation Plus are associated (or correlated) with Invesco Next. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Next Gen has no effect on the direction of WisdomTree Inflation i.e., WisdomTree Inflation and Invesco Next go up and down completely randomly.
Pair Corralation between WisdomTree Inflation and Invesco Next
Given the investment horizon of 90 days WisdomTree Inflation is expected to generate 1.19 times less return on investment than Invesco Next. But when comparing it to its historical volatility, WisdomTree Inflation Plus is 1.06 times less risky than Invesco Next. It trades about 0.09 of its potential returns per unit of risk. Invesco Next Gen is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 13,484 in Invesco Next Gen on November 11, 2025 and sell it today you would earn a total of 1,009 from holding Invesco Next Gen or generate 7.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Inflation Plus vs. Invesco Next Gen
Performance |
| Timeline |
| WisdomTree Inflation Plus |
| Invesco Next Gen |
WisdomTree Inflation and Invesco Next Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Inflation and Invesco Next
The main advantage of trading using opposite WisdomTree Inflation and Invesco Next positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Inflation position performs unexpectedly, Invesco Next 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 Invesco Next will offset losses from the drop in Invesco Next's long position.| WisdomTree Inflation vs. Spinnaker ETF Series | WisdomTree Inflation vs. Pacer Swan SOS | WisdomTree Inflation vs. Touchstone ETF Trust | WisdomTree Inflation vs. Federated Hermes ETF |
| Invesco Next vs. Neuberger Berman Carbon | Invesco Next vs. Barloworld Ltd ADR | Invesco Next vs. Morningstar Unconstrained Allocation | Invesco Next vs. High Yield Municipal Fund |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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