Correlation Between IPath Series and WisdomTree BioRevolution

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

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

Diversification Opportunities for IPath Series and WisdomTree BioRevolution

-0.57

Correlation Coefficient

IPath Series  WisdomTree BioRevolution

Excellent diversification

The 3 months correlation between IPath and WisdomTree is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding iPath Series B and WisdomTree BioRevolution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree BioRevolution and IPath Series 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 iPath Series B are associated (or correlated) with WisdomTree BioRevolution. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree BioRevolution has no effect on the direction of IPath Series i.e., IPath Series and WisdomTree BioRevolution go up and down completely randomly.

Pair Corralation between IPath Series and WisdomTree BioRevolution

Considering the 90-day investment horizon iPath Series B is expected to under-perform the WisdomTree BioRevolution. In addition to that, IPath Series is 1.78 times more volatile than WisdomTree BioRevolution. It trades about -0.04 of its total potential returns per unit of risk. WisdomTree BioRevolution is currently generating about 0.2 per unit of volatility. If you would invest  1,406  in WisdomTree BioRevolution on July 18, 2025 and sell it today you would earn a total of  349.00  from holding WisdomTree BioRevolution or generate 24.82% return on investment over 90 days.

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

iPath Series B  vs.  WisdomTree BioRevolution

iPath Series B

Risk-Adjusted Performance

Weakest

Over the last 90 days iPath Series B has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

WisdomTree BioRevolution

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree BioRevolution are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, WisdomTree BioRevolution sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IPath Series and WisdomTree BioRevolution

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

The idea behind iPath Series B and WisdomTree BioRevolution 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.