Correlation Between CoreCommodity Natural and WisdomTree SmallCap
Can any of the company-specific risk be diversified away by investing in both CoreCommodity Natural and WisdomTree SmallCap 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 CoreCommodity Natural and WisdomTree SmallCap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CoreCommodity Natural Resources and WisdomTree SmallCap Quality, you can compare the effects of market volatilities on CoreCommodity Natural and WisdomTree SmallCap 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 CoreCommodity Natural with a short position of WisdomTree SmallCap. Check out your portfolio center. Please also check ongoing floating volatility patterns of CoreCommodity Natural and WisdomTree SmallCap.
Diversification Opportunities for CoreCommodity Natural and WisdomTree SmallCap
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CoreCommodity and WisdomTree is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding CoreCommodity Natural Resource and WisdomTree SmallCap Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree SmallCap and CoreCommodity Natural 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 CoreCommodity Natural Resources are associated (or correlated) with WisdomTree SmallCap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree SmallCap has no effect on the direction of CoreCommodity Natural i.e., CoreCommodity Natural and WisdomTree SmallCap go up and down completely randomly.
Pair Corralation between CoreCommodity Natural and WisdomTree SmallCap
Given the investment horizon of 90 days CoreCommodity Natural Resources is expected to generate 1.1 times more return on investment than WisdomTree SmallCap. However, CoreCommodity Natural is 1.1 times more volatile than WisdomTree SmallCap Quality. It trades about 0.18 of its potential returns per unit of risk. WisdomTree SmallCap Quality is currently generating about 0.1 per unit of risk. If you would invest 3,031 in CoreCommodity Natural Resources on October 12, 2025 and sell it today you would earn a total of 422.00 from holding CoreCommodity Natural Resources or generate 13.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CoreCommodity Natural Resource vs. WisdomTree SmallCap Quality
Performance |
| Timeline |
| CoreCommodity Natural |
| WisdomTree SmallCap |
CoreCommodity Natural and WisdomTree SmallCap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CoreCommodity Natural and WisdomTree SmallCap
The main advantage of trading using opposite CoreCommodity Natural and WisdomTree SmallCap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CoreCommodity Natural position performs unexpectedly, WisdomTree SmallCap 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 SmallCap will offset losses from the drop in WisdomTree SmallCap's long position.| CoreCommodity Natural vs. InfraCap MLP ETF | CoreCommodity Natural vs. American Century ETF | CoreCommodity Natural vs. PIMCO RAFI Dynamic | CoreCommodity Natural vs. Simplify Exchange Traded |
| WisdomTree SmallCap vs. WisdomTree Japan SmallCap | WisdomTree SmallCap vs. iShares MSCI Sweden | WisdomTree SmallCap vs. iShares MSCI Emerging | WisdomTree SmallCap vs. JPMorgan Diversified Return |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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