Correlation Between WisdomTree China and WisdomTree MidCap
Can any of the company-specific risk be diversified away by investing in both WisdomTree China and WisdomTree MidCap 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 MidCap 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 MidCap Earnings, you can compare the effects of market volatilities on WisdomTree China and WisdomTree MidCap 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 MidCap. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree China and WisdomTree MidCap.
Diversification Opportunities for WisdomTree China and WisdomTree MidCap
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between WisdomTree and WisdomTree is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree China ex State Owne and WisdomTree MidCap Earnings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree MidCap 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 MidCap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree MidCap has no effect on the direction of WisdomTree China i.e., WisdomTree China and WisdomTree MidCap go up and down completely randomly.
Pair Corralation between WisdomTree China and WisdomTree MidCap
Given the investment horizon of 90 days WisdomTree China is expected to generate 1.82 times less return on investment than WisdomTree MidCap. In addition to that, WisdomTree China is 1.02 times more volatile than WisdomTree MidCap Earnings. It trades about 0.08 of its total potential returns per unit of risk. WisdomTree MidCap Earnings is currently generating about 0.15 per unit of volatility. If you would invest 6,698 in WisdomTree MidCap Earnings on September 27, 2025 and sell it today you would earn a total of 132.00 from holding WisdomTree MidCap Earnings or generate 1.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree China ex State Owne vs. WisdomTree MidCap Earnings
Performance |
| Timeline |
| WisdomTree China |
| WisdomTree MidCap |
WisdomTree China and WisdomTree MidCap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree China and WisdomTree MidCap
The main advantage of trading using opposite WisdomTree China and WisdomTree MidCap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree China position performs unexpectedly, WisdomTree MidCap 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 MidCap will offset losses from the drop in WisdomTree MidCap'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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |