Correlation Between Main Buywrite and WisdomTree International
Can any of the company-specific risk be diversified away by investing in both Main Buywrite 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 Main Buywrite and WisdomTree International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Main Buywrite ETF and WisdomTree International SmallCap, you can compare the effects of market volatilities on Main Buywrite 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 Main Buywrite with a short position of WisdomTree International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Main Buywrite and WisdomTree International.
Diversification Opportunities for Main Buywrite and WisdomTree International
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Main and WisdomTree is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Main Buywrite ETF and WisdomTree International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree International and Main Buywrite 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 Main Buywrite ETF 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 Main Buywrite i.e., Main Buywrite and WisdomTree International go up and down completely randomly.
Pair Corralation between Main Buywrite and WisdomTree International
Given the investment horizon of 90 days Main Buywrite is expected to generate 6.87 times less return on investment than WisdomTree International. But when comparing it to its historical volatility, Main Buywrite ETF is 2.0 times less risky than WisdomTree International. It trades about 0.1 of its potential returns per unit of risk. WisdomTree International SmallCap is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 7,853 in WisdomTree International SmallCap on November 29, 2025 and sell it today you would earn a total of 1,062 from holding WisdomTree International SmallCap or generate 13.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Main Buywrite ETF vs. WisdomTree International Small
Performance |
| Timeline |
| Main Buywrite ETF |
| WisdomTree International |
Main Buywrite and WisdomTree International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Main Buywrite and WisdomTree International
The main advantage of trading using opposite Main Buywrite and WisdomTree International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Main Buywrite 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.| Main Buywrite vs. SPDR SSGA Sector | Main Buywrite vs. Innovator SP 500 | Main Buywrite vs. Invesco CEF Income | Main Buywrite vs. Innovator SP 500 |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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