Correlation Between Invesco DB and WisdomTree Japan
Can any of the company-specific risk be diversified away by investing in both Invesco DB and WisdomTree Japan 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 Invesco DB and WisdomTree Japan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco DB Agriculture and WisdomTree Japan SmallCap, you can compare the effects of market volatilities on Invesco DB and WisdomTree Japan 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 Invesco DB with a short position of WisdomTree Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco DB and WisdomTree Japan.
Diversification Opportunities for Invesco DB and WisdomTree Japan
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and WisdomTree is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Invesco DB Agriculture and WisdomTree Japan SmallCap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Japan SmallCap and Invesco DB 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 Invesco DB Agriculture are associated (or correlated) with WisdomTree Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Japan SmallCap has no effect on the direction of Invesco DB i.e., Invesco DB and WisdomTree Japan go up and down completely randomly.
Pair Corralation between Invesco DB and WisdomTree Japan
Considering the 90-day investment horizon Invesco DB is expected to generate 17.09 times less return on investment than WisdomTree Japan. But when comparing it to its historical volatility, Invesco DB Agriculture is 1.99 times less risky than WisdomTree Japan. It trades about 0.04 of its potential returns per unit of risk. WisdomTree Japan SmallCap is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 9,016 in WisdomTree Japan SmallCap on November 18, 2025 and sell it today you would earn a total of 2,047 from holding WisdomTree Japan SmallCap or generate 22.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Invesco DB Agriculture vs. WisdomTree Japan SmallCap
Performance |
| Timeline |
| Invesco DB Agriculture |
| WisdomTree Japan SmallCap |
Invesco DB and WisdomTree Japan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco DB and WisdomTree Japan
The main advantage of trading using opposite Invesco DB and WisdomTree Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco DB position performs unexpectedly, WisdomTree Japan 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 Japan will offset losses from the drop in WisdomTree Japan's long position.| Invesco DB vs. iShares MSCI Italy | Invesco DB vs. iShares Insurance ETF | Invesco DB vs. iShares MSCI Hong | Invesco DB vs. SPDR SP Insurance |
| WisdomTree Japan vs. WisdomTree SmallCap Quality | WisdomTree Japan vs. iShares MSCI Indonesia | WisdomTree Japan vs. WisdomTree Cloud Computing | WisdomTree Japan vs. Davis Select Financial |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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