Correlation Between WisdomTree Wheat and WisdomTree Physical

Can any of the company-specific risk be diversified away by investing in both WisdomTree Wheat and WisdomTree Physical 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 Physical 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 Physical Bitcoin, you can compare the effects of market volatilities on WisdomTree Wheat and WisdomTree Physical 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 Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Wheat and WisdomTree Physical.

Diversification Opportunities for WisdomTree Wheat and WisdomTree Physical

-0.38

Correlation Coefficient

WisdomTree Wheat  WisdomTree Physical

Very good diversification

The 3 months correlation between WisdomTree and WisdomTree is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Wheat EUR and WisdomTree Physical Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Physical 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 Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Physical has no effect on the direction of WisdomTree Wheat i.e., WisdomTree Wheat and WisdomTree Physical go up and down completely randomly.

Pair Corralation between WisdomTree Wheat and WisdomTree Physical

Assuming the 90 days trading horizon WisdomTree Wheat EUR is expected to under-perform the WisdomTree Physical. But the etf apears to be less risky and, when comparing its historical volatility, WisdomTree Wheat EUR is 1.16 times less risky than WisdomTree Physical. The etf trades about -0.02 of its potential returns per unit of risk. The WisdomTree Physical Bitcoin is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,964  in WisdomTree Physical Bitcoin on April 24, 2025 and sell it today you would earn a total of  461.00  from holding WisdomTree Physical Bitcoin or generate 23.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

WisdomTree Wheat EUR  vs.  WisdomTree Physical Bitcoin

WisdomTree Wheat EUR

Risk-Adjusted Performance

Very Weak

Over the last 90 days WisdomTree Wheat EUR has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, WisdomTree Wheat is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

WisdomTree Physical

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Physical Bitcoin are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, WisdomTree Physical sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WisdomTree Wheat and WisdomTree Physical

The main advantage of trading using opposite WisdomTree Wheat and WisdomTree Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Wheat position performs unexpectedly, WisdomTree Physical 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 Physical will offset losses from the drop in WisdomTree Physical's long position.

The idea behind WisdomTree Wheat EUR and WisdomTree Physical Bitcoin pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.