Correlation Between WisdomTree Issuer and WisdomTree Battery

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

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

Diversification Opportunities for WisdomTree Issuer and WisdomTree Battery

0.54

Correlation Coefficient

WisdomTree Issuer  WisdomTree Battery

Very weak diversification

The 3 months correlation between WisdomTree and WisdomTree is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Issuer ICAV and WisdomTree Battery Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Battery Value and WisdomTree Issuer 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 Issuer ICAV are associated (or correlated) with WisdomTree Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Battery Value has no effect on the direction of WisdomTree Issuer i.e., WisdomTree Issuer and WisdomTree Battery go up and down completely randomly.

Pair Corralation between WisdomTree Issuer and WisdomTree Battery

Assuming the 90 days horizon WisdomTree Issuer ICAV is expected to generate 0.82 times more return on investment than WisdomTree Battery. However, WisdomTree Issuer ICAV is 1.21 times less risky than WisdomTree Battery. It trades about 0.22 of its potential returns per unit of risk. WisdomTree Battery Value is currently generating about 0.16 per unit of risk. If you would invest  3,832  in WisdomTree Issuer ICAV on April 25, 2025 and sell it today you would earn a total of  508.00  from holding WisdomTree Issuer ICAV or generate 13.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	68.85%
Values	Daily Returns

WisdomTree Issuer ICAV  vs.  WisdomTree Battery Value

WisdomTree Issuer ICAV

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Issuer ICAV are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental indicators, WisdomTree Issuer reported solid returns over the last few months and may actually be approaching a breakup point.

WisdomTree Battery Value

Risk-Adjusted Performance

Good

Over the last 90 days WisdomTree Battery Value has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively inconsistent basic indicators, WisdomTree Battery may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with WisdomTree Issuer and WisdomTree Battery

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

The idea behind WisdomTree Issuer ICAV and WisdomTree Battery Value 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.