Correlation Between WisdomTree Europe and Defiance Leveraged
Can any of the company-specific risk be diversified away by investing in both WisdomTree Europe and Defiance Leveraged 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 Defiance Leveraged 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 Defiance Leveraged Long, you can compare the effects of market volatilities on WisdomTree Europe and Defiance Leveraged 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 Defiance Leveraged. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Europe and Defiance Leveraged.
Diversification Opportunities for WisdomTree Europe and Defiance Leveraged
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WisdomTree and Defiance is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Europe SmallCap and Defiance Leveraged Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defiance Leveraged Long 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 Defiance Leveraged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defiance Leveraged Long has no effect on the direction of WisdomTree Europe i.e., WisdomTree Europe and Defiance Leveraged go up and down completely randomly.
Pair Corralation between WisdomTree Europe and Defiance Leveraged
Considering the 90-day investment horizon WisdomTree Europe SmallCap is expected to generate 0.08 times more return on investment than Defiance Leveraged. However, WisdomTree Europe SmallCap is 12.23 times less risky than Defiance Leveraged. It trades about 0.15 of its potential returns per unit of risk. Defiance Leveraged Long is currently generating about -0.03 per unit of risk. If you would invest 6,973 in WisdomTree Europe SmallCap on December 5, 2025 and sell it today you would earn a total of 559.00 from holding WisdomTree Europe SmallCap or generate 8.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Europe SmallCap vs. Defiance Leveraged Long
Performance |
| Timeline |
| WisdomTree Europe |
| Defiance Leveraged Long |
WisdomTree Europe and Defiance Leveraged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Europe and Defiance Leveraged
The main advantage of trading using opposite WisdomTree Europe and Defiance Leveraged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Europe position performs unexpectedly, Defiance Leveraged 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 Defiance Leveraged will offset losses from the drop in Defiance Leveraged'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 |
| Defiance Leveraged vs. Morningstar Unconstrained Allocation | Defiance Leveraged vs. Thrivent High Yield | Defiance Leveraged vs. Via Renewables | Defiance Leveraged vs. T Rowe Price |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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