Correlation Between WisdomTree Europe and ProShares MSCI
Can any of the company-specific risk be diversified away by investing in both WisdomTree Europe and ProShares MSCI 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 Europe and ProShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Europe SmallCap and ProShares MSCI Emerging, you can compare the effects of market volatilities on WisdomTree Europe and ProShares MSCI 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 Europe with a short position of ProShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Europe and ProShares MSCI.
Diversification Opportunities for WisdomTree Europe and ProShares MSCI
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WisdomTree and ProShares is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Europe SmallCap and ProShares MSCI Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares MSCI Emerging and WisdomTree Europe 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 Europe SmallCap are associated (or correlated) with ProShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares MSCI Emerging has no effect on the direction of WisdomTree Europe i.e., WisdomTree Europe and ProShares MSCI go up and down completely randomly.
Pair Corralation between WisdomTree Europe and ProShares MSCI
Considering the 90-day investment horizon WisdomTree Europe SmallCap is expected to generate 1.29 times more return on investment than ProShares MSCI. However, WisdomTree Europe is 1.29 times more volatile than ProShares MSCI Emerging. It trades about 0.27 of its potential returns per unit of risk. ProShares MSCI Emerging is currently generating about 0.07 per unit of risk. If you would invest 6,895 in WisdomTree Europe SmallCap on November 30, 2025 and sell it today you would earn a total of 873.00 from holding WisdomTree Europe SmallCap or generate 12.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Europe SmallCap vs. ProShares MSCI Emerging
Performance |
| Timeline |
| WisdomTree Europe |
| ProShares MSCI Emerging |
WisdomTree Europe and ProShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Europe and ProShares MSCI
The main advantage of trading using opposite WisdomTree Europe and ProShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Europe position performs unexpectedly, ProShares MSCI 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 ProShares MSCI will offset losses from the drop in ProShares MSCI's long position.| WisdomTree Europe vs. WisdomTree International MidCap | WisdomTree Europe vs. iShares MSCI Turkey | WisdomTree Europe vs. iShares Currency Hedged | WisdomTree Europe vs. iShares MSCI Japan |
| ProShares MSCI vs. ProShares MSCI Europe | ProShares MSCI vs. JPMorgan Fundamental Data | ProShares MSCI vs. SPDR SP SmallCap | ProShares MSCI vs. iShares ESG MSCI |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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