Correlation Between Associated Capital and WisdomTree

Can any of the company-specific risk be diversified away by investing in both Associated Capital and WisdomTree 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 Associated Capital and WisdomTree into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Associated Capital Group and WisdomTree, you can compare the effects of market volatilities on Associated Capital and WisdomTree 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 Associated Capital with a short position of WisdomTree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and WisdomTree.

Diversification Opportunities for Associated Capital and WisdomTree

-0.65

Correlation Coefficient

Associated Capital  WisdomTree

Excellent diversification

The 3 months correlation between Associated and WisdomTree is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and WisdomTree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree and Associated Capital 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 Associated Capital Group are associated (or correlated) with WisdomTree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree has no effect on the direction of Associated Capital i.e., Associated Capital and WisdomTree go up and down completely randomly.

Pair Corralation between Associated Capital and WisdomTree

Allowing for the 90-day total investment horizon Associated Capital Group is expected to under-perform the WisdomTree. But the stock apears to be less risky and, when comparing its historical volatility, Associated Capital Group is 1.23 times less risky than WisdomTree. The stock trades about -0.02 of its potential returns per unit of risk. The WisdomTree is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  853.00  in WisdomTree on July 2, 2025 and sell it today you would earn a total of  536.00  from holding WisdomTree or generate 62.84% return on investment over 90 days.

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

Associated Capital Group  vs.  WisdomTree

Associated Capital

Risk-Adjusted Performance

Weakest

Over the last 90 days Associated Capital Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

WisdomTree

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, WisdomTree unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Associated Capital and WisdomTree

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

The idea behind Associated Capital Group and WisdomTree 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.