Correlation Between WisdomTree Europe and Invesco Intermediate
Can any of the company-specific risk be diversified away by investing in both WisdomTree Europe and Invesco Intermediate 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 Invesco Intermediate 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 Invesco Intermediate Municipal, you can compare the effects of market volatilities on WisdomTree Europe and Invesco Intermediate 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 Invesco Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Europe and Invesco Intermediate.
Diversification Opportunities for WisdomTree Europe and Invesco Intermediate
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WisdomTree and Invesco is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Europe SmallCap and Invesco Intermediate Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Intermediate 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 Invesco Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Intermediate has no effect on the direction of WisdomTree Europe i.e., WisdomTree Europe and Invesco Intermediate go up and down completely randomly.
Pair Corralation between WisdomTree Europe and Invesco Intermediate
Considering the 90-day investment horizon WisdomTree Europe SmallCap is expected to generate 8.1 times more return on investment than Invesco Intermediate. However, WisdomTree Europe is 8.1 times more volatile than Invesco Intermediate Municipal. It trades about 0.28 of its potential returns per unit of risk. Invesco Intermediate Municipal is currently generating about 0.46 per unit of risk. If you would invest 6,895 in WisdomTree Europe SmallCap on November 29, 2025 and sell it today you would earn a total of 888.00 from holding WisdomTree Europe SmallCap or generate 12.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.36% |
| Values | Daily Returns |
WisdomTree Europe SmallCap vs. Invesco Intermediate Municipal
Performance |
| Timeline |
| WisdomTree Europe |
| Invesco Intermediate |
WisdomTree Europe and Invesco Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Europe and Invesco Intermediate
The main advantage of trading using opposite WisdomTree Europe and Invesco Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Europe position performs unexpectedly, Invesco Intermediate 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 Invesco Intermediate will offset losses from the drop in Invesco Intermediate's long position.| WisdomTree Europe vs. iShares MSCI Japan | WisdomTree Europe vs. WisdomTree International MidCap | WisdomTree Europe vs. iShares Small Cap | WisdomTree Europe vs. iShares Currency Hedged |
| Invesco Intermediate vs. Goldman Sachs ETF | Invesco Intermediate vs. FlexShares Quality Low | Invesco Intermediate vs. Zacks Trust | Invesco Intermediate vs. Principal Value 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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