Correlation Between WisdomTree Dynamic and Dimensional Emerging
Can any of the company-specific risk be diversified away by investing in both WisdomTree Dynamic and Dimensional Emerging 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 Dynamic and Dimensional Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Dynamic Currency and Dimensional Emerging Markets, you can compare the effects of market volatilities on WisdomTree Dynamic and Dimensional Emerging 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 Dynamic with a short position of Dimensional Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Dynamic and Dimensional Emerging.
Diversification Opportunities for WisdomTree Dynamic and Dimensional Emerging
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WisdomTree and Dimensional is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Dynamic Currency and Dimensional Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional Emerging and WisdomTree Dynamic 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 Dynamic Currency are associated (or correlated) with Dimensional Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional Emerging has no effect on the direction of WisdomTree Dynamic i.e., WisdomTree Dynamic and Dimensional Emerging go up and down completely randomly.
Pair Corralation between WisdomTree Dynamic and Dimensional Emerging
Given the investment horizon of 90 days WisdomTree Dynamic is expected to generate 1.31 times less return on investment than Dimensional Emerging. But when comparing it to its historical volatility, WisdomTree Dynamic Currency is 1.56 times less risky than Dimensional Emerging. It trades about 0.57 of its potential returns per unit of risk. Dimensional Emerging Markets is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 4,054 in Dimensional Emerging Markets on October 17, 2025 and sell it today you would earn a total of 291.00 from holding Dimensional Emerging Markets or generate 7.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Dynamic Currency vs. Dimensional Emerging Markets
Performance |
| Timeline |
| WisdomTree Dynamic |
| Dimensional Emerging |
WisdomTree Dynamic and Dimensional Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Dynamic and Dimensional Emerging
The main advantage of trading using opposite WisdomTree Dynamic and Dimensional Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Dynamic position performs unexpectedly, Dimensional Emerging 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 Dimensional Emerging will offset losses from the drop in Dimensional Emerging's long position.| WisdomTree Dynamic vs. iShares MSCI Poland | WisdomTree Dynamic vs. iShares MSCI Emerging | WisdomTree Dynamic vs. Xtrackers MSCI Japan | WisdomTree Dynamic vs. iShares MSCI Japan |
| Dimensional Emerging vs. SPDR SP International | Dimensional Emerging vs. Elm Market Navigator | Dimensional Emerging vs. Davis Select Worldwide | Dimensional Emerging vs. Invesco DWA Developed |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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