Correlation Between WisdomTree Europe and VanEck Preferred
Can any of the company-specific risk be diversified away by investing in both WisdomTree Europe and VanEck Preferred 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 VanEck Preferred 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 VanEck Preferred Securities, you can compare the effects of market volatilities on WisdomTree Europe and VanEck Preferred 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 VanEck Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Europe and VanEck Preferred.
Diversification Opportunities for WisdomTree Europe and VanEck Preferred
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WisdomTree and VanEck is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Europe SmallCap and VanEck Preferred Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Preferred Sec 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 VanEck Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Preferred Sec has no effect on the direction of WisdomTree Europe i.e., WisdomTree Europe and VanEck Preferred go up and down completely randomly.
Pair Corralation between WisdomTree Europe and VanEck Preferred
Considering the 90-day investment horizon WisdomTree Europe SmallCap is expected to generate 1.43 times more return on investment than VanEck Preferred. However, WisdomTree Europe is 1.43 times more volatile than VanEck Preferred Securities. It trades about 0.27 of its potential returns per unit of risk. VanEck Preferred Securities is currently generating about 0.22 per unit of risk. If you would invest 6,926 in WisdomTree Europe SmallCap on November 28, 2025 and sell it today you would earn a total of 857.00 from holding WisdomTree Europe SmallCap or generate 12.37% 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. VanEck Preferred Securities
Performance |
| Timeline |
| WisdomTree Europe |
| VanEck Preferred Sec |
WisdomTree Europe and VanEck Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Europe and VanEck Preferred
The main advantage of trading using opposite WisdomTree Europe and VanEck Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Europe position performs unexpectedly, VanEck Preferred 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 VanEck Preferred will offset losses from the drop in VanEck Preferred'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 |
| VanEck Preferred vs. Xtrackers USD High | VanEck Preferred vs. SPDR DoubleLine Total | VanEck Preferred vs. Invesco SP 500 | VanEck Preferred vs. Fidelity Freedom Index |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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