Correlation Between WisdomTree STOXX and WisdomTree Global
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Can any of the company-specific risk be diversified away by investing in both WisdomTree STOXX and WisdomTree Global 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 STOXX and WisdomTree Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree STOXX Europe and WisdomTree Global Quality, you can compare the effects of market volatilities on WisdomTree STOXX and WisdomTree Global 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 STOXX with a short position of WisdomTree Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree STOXX and WisdomTree Global.
Diversification Opportunities for WisdomTree STOXX and WisdomTree Global
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between WisdomTree and WisdomTree is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree STOXX Europe and WisdomTree Global Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Global Quality and WisdomTree STOXX 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 STOXX Europe are associated (or correlated) with WisdomTree Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Global Quality has no effect on the direction of WisdomTree STOXX i.e., WisdomTree STOXX and WisdomTree Global go up and down completely randomly.
Pair Corralation between WisdomTree STOXX and WisdomTree Global
Assuming the 90 days trading horizon WisdomTree STOXX is expected to generate 2.38 times less return on investment than WisdomTree Global. In addition to that, WisdomTree STOXX is 4.04 times more volatile than WisdomTree Global Quality. It trades about 0.02 of its total potential returns per unit of risk. WisdomTree Global Quality is currently generating about 0.17 per unit of volatility. If you would invest 3,813 in WisdomTree Global Quality on November 21, 2025 and sell it today you would earn a total of 238.00 from holding WisdomTree Global Quality or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree STOXX Europe vs. WisdomTree Global Quality
Performance |
| Timeline |
| WisdomTree STOXX Europe |
| WisdomTree Global Quality |
WisdomTree STOXX and WisdomTree Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree STOXX and WisdomTree Global
The main advantage of trading using opposite WisdomTree STOXX and WisdomTree Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree STOXX position performs unexpectedly, WisdomTree Global 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 Global will offset losses from the drop in WisdomTree Global's long position.| WisdomTree STOXX vs. UBS Fund Solutions | WisdomTree STOXX vs. Xtrackers II | WisdomTree STOXX vs. Xtrackers Nikkei 225 | WisdomTree STOXX vs. iShares VII PLC |
| WisdomTree Global vs. WisdomTree WTI Crude | WisdomTree Global vs. WisdomTree Battery Metals | WisdomTree Global vs. WisdomTree STOXX Europe | WisdomTree Global vs. WisdomTree Physical Silver |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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