Correlation Between IShares Trust and WisdomTree Siegel

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Can any of the company-specific risk be diversified away by investing in both IShares Trust and WisdomTree Siegel 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 IShares Trust and WisdomTree Siegel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Trust and WisdomTree Siegel Moderate, you can compare the effects of market volatilities on IShares Trust and WisdomTree Siegel 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 IShares Trust with a short position of WisdomTree Siegel. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and WisdomTree Siegel.

Diversification Opportunities for IShares Trust and WisdomTree Siegel

0.98
  Correlation Coefficient

Almost no diversification

The 3 months correlation between IShares and WisdomTree is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding iShares Trust and WisdomTree Siegel Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Siegel and IShares Trust 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 iShares Trust are associated (or correlated) with WisdomTree Siegel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Siegel has no effect on the direction of IShares Trust i.e., IShares Trust and WisdomTree Siegel go up and down completely randomly.

Pair Corralation between IShares Trust and WisdomTree Siegel

Given the investment horizon of 90 days iShares Trust is expected to generate 1.11 times more return on investment than WisdomTree Siegel. However, IShares Trust is 1.11 times more volatile than WisdomTree Siegel Moderate. It trades about 0.25 of its potential returns per unit of risk. WisdomTree Siegel Moderate is currently generating about 0.22 per unit of risk. If you would invest  3,102  in iShares Trust on May 2, 2025 and sell it today you would earn a total of  234.00  from holding iShares Trust or generate 7.54% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

iShares Trust  vs.  WisdomTree Siegel Moderate

 Performance 
       Timeline  
iShares Trust 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in iShares Trust are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, IShares Trust may actually be approaching a critical reversion point that can send shares even higher in August 2025.
WisdomTree Siegel 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Siegel Moderate are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, WisdomTree Siegel is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

IShares Trust and WisdomTree Siegel Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IShares Trust and WisdomTree Siegel

The main advantage of trading using opposite IShares Trust and WisdomTree Siegel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Trust position performs unexpectedly, WisdomTree Siegel 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 Siegel will offset losses from the drop in WisdomTree Siegel's long position.
The idea behind iShares Trust and WisdomTree Siegel Moderate 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.
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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