Correlation Between IShares Gold and WisdomTree International
Can any of the company-specific risk be diversified away by investing in both IShares Gold and WisdomTree International 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 IShares Gold and WisdomTree International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Gold Trust and WisdomTree International Efficient, you can compare the effects of market volatilities on IShares Gold and WisdomTree International 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 IShares Gold with a short position of WisdomTree International. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Gold and WisdomTree International.
Diversification Opportunities for IShares Gold and WisdomTree International
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IShares and WisdomTree is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding iShares Gold Trust and WisdomTree International Effic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree International and IShares Gold 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 iShares Gold Trust are associated (or correlated) with WisdomTree International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree International has no effect on the direction of IShares Gold i.e., IShares Gold and WisdomTree International go up and down completely randomly.
Pair Corralation between IShares Gold and WisdomTree International
Given the investment horizon of 90 days iShares Gold Trust is expected to generate 1.13 times more return on investment than WisdomTree International. However, IShares Gold is 1.13 times more volatile than WisdomTree International Efficient. It trades about 0.14 of its potential returns per unit of risk. WisdomTree International Efficient is currently generating about 0.09 per unit of risk. If you would invest 3,302 in iShares Gold Trust on June 6, 2025 and sell it today you would earn a total of 252.00 from holding iShares Gold Trust or generate 7.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Gold Trust vs. WisdomTree International Effic
Performance |
| Timeline |
| iShares Gold Trust |
| WisdomTree International |
IShares Gold and WisdomTree International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Gold and WisdomTree International
The main advantage of trading using opposite IShares Gold and WisdomTree International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Gold position performs unexpectedly, WisdomTree International 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 International will offset losses from the drop in WisdomTree International's long position.| IShares Gold vs. Goldman Sachs Physical | IShares Gold vs. GraniteShares Gold Trust | IShares Gold vs. SPDR Gold Mini | IShares Gold vs. VanEck Merk Gold |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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