Correlation Between WisdomTree SmallCap and WisdomTree International
Can any of the company-specific risk be diversified away by investing in both WisdomTree SmallCap 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 SmallCap 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 SmallCap Dividend and WisdomTree International Al, you can compare the effects of market volatilities on WisdomTree SmallCap 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 SmallCap with a short position of WisdomTree International. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree SmallCap and WisdomTree International.
Diversification Opportunities for WisdomTree SmallCap and WisdomTree International
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WisdomTree and WisdomTree is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree SmallCap Dividend and WisdomTree International Al in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree International and WisdomTree SmallCap 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 SmallCap Dividend 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 SmallCap i.e., WisdomTree SmallCap and WisdomTree International go up and down completely randomly.
Pair Corralation between WisdomTree SmallCap and WisdomTree International
Considering the 90-day investment horizon WisdomTree SmallCap is expected to generate 1.37 times less return on investment than WisdomTree International. In addition to that, WisdomTree SmallCap is 1.74 times more volatile than WisdomTree International Al. It trades about 0.17 of its total potential returns per unit of risk. WisdomTree International Al is currently generating about 0.41 per unit of volatility. If you would invest 5,014 in WisdomTree International Al on November 29, 2025 and sell it today you would earn a total of 800.00 from holding WisdomTree International Al or generate 15.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree SmallCap Dividend vs. WisdomTree International Al
Performance |
| Timeline |
| WisdomTree SmallCap |
| WisdomTree International |
WisdomTree SmallCap and WisdomTree International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree SmallCap and WisdomTree International
The main advantage of trading using opposite WisdomTree SmallCap and WisdomTree International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree SmallCap 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 SmallCap vs. WisdomTree Emerging Markets | WisdomTree SmallCap vs. WisdomTree Europe Hedged | WisdomTree SmallCap vs. iShares Global Energy | WisdomTree SmallCap vs. iShares Financial Services |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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