Correlation Between WisdomTree Physical and WisdomTree Bitcoin
Can any of the company-specific risk be diversified away by investing in both WisdomTree Physical and WisdomTree Bitcoin 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 Physical and WisdomTree Bitcoin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Physical XRP and WisdomTree Bitcoin, you can compare the effects of market volatilities on WisdomTree Physical and WisdomTree Bitcoin 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 Physical with a short position of WisdomTree Bitcoin. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Physical and WisdomTree Bitcoin.
Diversification Opportunities for WisdomTree Physical and WisdomTree Bitcoin
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WisdomTree and WisdomTree is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Physical XRP and WisdomTree Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Bitcoin and WisdomTree Physical 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 Physical XRP are associated (or correlated) with WisdomTree Bitcoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Bitcoin has no effect on the direction of WisdomTree Physical i.e., WisdomTree Physical and WisdomTree Bitcoin go up and down completely randomly.
Pair Corralation between WisdomTree Physical and WisdomTree Bitcoin
Assuming the 90 days trading horizon WisdomTree Physical XRP is expected to under-perform the WisdomTree Bitcoin. In addition to that, WisdomTree Physical is 1.16 times more volatile than WisdomTree Bitcoin. It trades about -0.29 of its total potential returns per unit of risk. WisdomTree Bitcoin is currently generating about -0.04 per unit of volatility. If you would invest 2,169 in WisdomTree Bitcoin on October 3, 2025 and sell it today you would lose (45.00) from holding WisdomTree Bitcoin or give up 2.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Physical XRP vs. WisdomTree Bitcoin
Performance |
| Timeline |
| WisdomTree Physical XRP |
| WisdomTree Bitcoin |
WisdomTree Physical and WisdomTree Bitcoin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Physical and WisdomTree Bitcoin
The main advantage of trading using opposite WisdomTree Physical and WisdomTree Bitcoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Physical position performs unexpectedly, WisdomTree Bitcoin 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 Bitcoin will offset losses from the drop in WisdomTree Bitcoin's long position.| WisdomTree Physical vs. WisdomTree Physical Palladium | WisdomTree Physical vs. WisdomTree Bitcoin | WisdomTree Physical vs. WisdomTree Physical Platinum | WisdomTree Physical vs. WisdomTree Physical Silver |
| WisdomTree Bitcoin vs. WisdomTree Physical Palladium | WisdomTree Bitcoin vs. WisdomTree Physical XRP | WisdomTree Bitcoin vs. WisdomTree Physical Platinum | WisdomTree Bitcoin vs. WisdomTree Physical Silver |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |