Correlation Between Grayscale Funds and WisdomTree Japan
Can any of the company-specific risk be diversified away by investing in both Grayscale Funds and WisdomTree Japan 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 Grayscale Funds and WisdomTree Japan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grayscale Funds Trust and WisdomTree Japan SmallCap, you can compare the effects of market volatilities on Grayscale Funds and WisdomTree Japan 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 Grayscale Funds with a short position of WisdomTree Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grayscale Funds and WisdomTree Japan.
Diversification Opportunities for Grayscale Funds and WisdomTree Japan
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grayscale and WisdomTree is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Grayscale Funds Trust and WisdomTree Japan SmallCap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Japan SmallCap and Grayscale Funds 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 Grayscale Funds Trust are associated (or correlated) with WisdomTree Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Japan SmallCap has no effect on the direction of Grayscale Funds i.e., Grayscale Funds and WisdomTree Japan go up and down completely randomly.
Pair Corralation between Grayscale Funds and WisdomTree Japan
Considering the 90-day investment horizon Grayscale Funds Trust is expected to under-perform the WisdomTree Japan. In addition to that, Grayscale Funds is 3.62 times more volatile than WisdomTree Japan SmallCap. It trades about -0.25 of its total potential returns per unit of risk. WisdomTree Japan SmallCap is currently generating about 0.26 per unit of volatility. If you would invest 9,177 in WisdomTree Japan SmallCap on November 8, 2025 and sell it today you would earn a total of 1,258 from holding WisdomTree Japan SmallCap or generate 13.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grayscale Funds Trust vs. WisdomTree Japan SmallCap
Performance |
| Timeline |
| Grayscale Funds Trust |
| WisdomTree Japan SmallCap |
Grayscale Funds and WisdomTree Japan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grayscale Funds and WisdomTree Japan
The main advantage of trading using opposite Grayscale Funds and WisdomTree Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grayscale Funds position performs unexpectedly, WisdomTree Japan 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 Japan will offset losses from the drop in WisdomTree Japan's long position.| Grayscale Funds vs. Sp Midcap 400 | Grayscale Funds vs. Transportation Fund Investor | Grayscale Funds vs. Retailing Fund Investor | Grayscale Funds vs. SMART Earnings Growth |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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