Correlation Between WisdomTree Battery and IShares NASDAQ

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

By analyzing existing cross correlation between WisdomTree Battery Solutions and iShares NASDAQ 100, you can compare the effects of market volatilities on WisdomTree Battery and IShares NASDAQ 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 Battery with a short position of IShares NASDAQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Battery and IShares NASDAQ.

Diversification Opportunities for WisdomTree Battery and IShares NASDAQ

0.86

Correlation Coefficient

WisdomTree Battery  IShares NASDAQ

Very poor diversification

The 3 months correlation between WisdomTree and IShares is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Battery Solutions and iShares NASDAQ 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares NASDAQ 100 and WisdomTree Battery 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 Battery Solutions are associated (or correlated) with IShares NASDAQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares NASDAQ 100 has no effect on the direction of WisdomTree Battery i.e., WisdomTree Battery and IShares NASDAQ go up and down completely randomly.

Pair Corralation between WisdomTree Battery and IShares NASDAQ

Assuming the 90 days trading horizon WisdomTree Battery Solutions is expected to generate 1.7 times more return on investment than IShares NASDAQ. However, WisdomTree Battery is 1.7 times more volatile than iShares NASDAQ 100. It trades about 0.24 of its potential returns per unit of risk. iShares NASDAQ 100 is currently generating about 0.28 per unit of risk. If you would invest  2,932  in WisdomTree Battery Solutions on May 8, 2025 and sell it today you would earn a total of  670.00  from holding WisdomTree Battery Solutions or generate 22.85% return on investment over 90 days.

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

WisdomTree Battery Solutions  vs.  iShares NASDAQ 100

WisdomTree Battery

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Battery Solutions are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, WisdomTree Battery showed solid returns over the last few months and may actually be approaching a breakup point.

iShares NASDAQ 100

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares NASDAQ 100 are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, IShares NASDAQ unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WisdomTree Battery and IShares NASDAQ

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

The idea behind WisdomTree Battery Solutions and iShares NASDAQ 100 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.