Correlation Between WisdomTree China and WisdomTree International
Can any of the company-specific risk be diversified away by investing in both WisdomTree China 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 WisdomTree China and WisdomTree International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree China ex State Owned and WisdomTree International LargeCap, you can compare the effects of market volatilities on WisdomTree China 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 WisdomTree China with a short position of WisdomTree International. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree China and WisdomTree International.
Diversification Opportunities for WisdomTree China and WisdomTree International
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between WisdomTree and WisdomTree is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree China ex State Owne and WisdomTree International Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree International and WisdomTree China 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 China ex State Owned 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 WisdomTree China i.e., WisdomTree China and WisdomTree International go up and down completely randomly.
Pair Corralation between WisdomTree China and WisdomTree International
Given the investment horizon of 90 days WisdomTree China ex State Owned is expected to generate 2.24 times more return on investment than WisdomTree International. However, WisdomTree China is 2.24 times more volatile than WisdomTree International LargeCap. It trades about 0.08 of its potential returns per unit of risk. WisdomTree International LargeCap is currently generating about 0.1 per unit of risk. If you would invest 2,527 in WisdomTree China ex State Owned on October 21, 2025 and sell it today you would earn a total of 1,647 from holding WisdomTree China ex State Owned or generate 65.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree China ex State Owne vs. WisdomTree International Large
Performance |
| Timeline |
| WisdomTree China |
| WisdomTree International |
WisdomTree China and WisdomTree International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree China and WisdomTree International
The main advantage of trading using opposite WisdomTree China and WisdomTree International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree China 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.| WisdomTree China vs. WisdomTree International Equity | WisdomTree China vs. iShares Morningstar Small Cap | WisdomTree China vs. WisdomTree SmallCap Earnings | WisdomTree China vs. Longview Advantage ETF |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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