Correlation Between Sipef NV and WisdomTree Physical

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

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

Diversification Opportunities for Sipef NV and WisdomTree Physical

0.54

Correlation Coefficient

Sipef NV  WisdomTree Physical

Very weak diversification

The 3 months correlation between Sipef and WisdomTree is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Sipef NV and WisdomTree Physical Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Physical Gold and Sipef NV 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 Sipef NV 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 Gold has no effect on the direction of Sipef NV i.e., Sipef NV and WisdomTree Physical go up and down completely randomly.

Pair Corralation between Sipef NV and WisdomTree Physical

Assuming the 90 days trading horizon Sipef NV is expected to generate 20.72 times less return on investment than WisdomTree Physical. In addition to that, Sipef NV is 1.25 times more volatile than WisdomTree Physical Gold. It trades about 0.02 of its total potential returns per unit of risk. WisdomTree Physical Gold is currently generating about 0.49 per unit of volatility. If you would invest  28,407  in WisdomTree Physical Gold on July 5, 2025 and sell it today you would earn a total of  2,060  from holding WisdomTree Physical Gold or generate 7.25% return on investment over 90 days.

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

Sipef NV  vs.  WisdomTree Physical Gold

Sipef NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sipef NV are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Sipef NV reported solid returns over the last few months and may actually be approaching a breakup point.

WisdomTree Physical Gold

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Physical Gold are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, WisdomTree Physical unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sipef NV and WisdomTree Physical

The main advantage of trading using opposite Sipef NV and WisdomTree Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sipef NV 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 Sipef NV and WisdomTree Physical Gold 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.