Correlation Between WisdomTree EURO and WisdomTree
Can any of the company-specific risk be diversified away by investing in both WisdomTree EURO and WisdomTree 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 EURO and WisdomTree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree EURO STOXX and WisdomTree SP 500, you can compare the effects of market volatilities on WisdomTree EURO and WisdomTree 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 EURO with a short position of WisdomTree. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree EURO and WisdomTree.
Diversification Opportunities for WisdomTree EURO and WisdomTree
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WisdomTree and WisdomTree is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree EURO STOXX and WisdomTree SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree SP 500 and WisdomTree EURO 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 EURO STOXX are associated (or correlated) with WisdomTree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree SP 500 has no effect on the direction of WisdomTree EURO i.e., WisdomTree EURO and WisdomTree go up and down completely randomly.
Pair Corralation between WisdomTree EURO and WisdomTree
Assuming the 90 days trading horizon WisdomTree EURO STOXX is expected to generate 1.61 times more return on investment than WisdomTree. However, WisdomTree EURO is 1.61 times more volatile than WisdomTree SP 500. It trades about 0.26 of its potential returns per unit of risk. WisdomTree SP 500 is currently generating about 0.01 per unit of risk. If you would invest 396,000 in WisdomTree EURO STOXX on October 6, 2025 and sell it today you would earn a total of 169,300 from holding WisdomTree EURO STOXX or generate 42.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree EURO STOXX vs. WisdomTree SP 500
Performance |
| Timeline |
| WisdomTree EURO STOXX |
| WisdomTree SP 500 |
WisdomTree EURO and WisdomTree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree EURO and WisdomTree
The main advantage of trading using opposite WisdomTree EURO and WisdomTree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree EURO position performs unexpectedly, WisdomTree 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 will offset losses from the drop in WisdomTree's long position.| WisdomTree EURO vs. WisdomTree Zinc | WisdomTree EURO vs. WisdomTree Brent Crude | WisdomTree EURO vs. WisdomTree Aluminium 2x | WisdomTree EURO vs. WisdomTree Enhanced Commodity |
| WisdomTree vs. WisdomTree Zinc | WisdomTree vs. WisdomTree Brent Crude | WisdomTree vs. WisdomTree Aluminium 2x | WisdomTree vs. WisdomTree Enhanced Commodity |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |