Correlation Between WisdomTree Europe and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both WisdomTree Europe and SPDR 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 SPDR 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 SPDR MSCI Emerging, you can compare the effects of market volatilities on WisdomTree Europe and SPDR 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 SPDR MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Europe and SPDR MSCI.
Diversification Opportunities for WisdomTree Europe and SPDR MSCI
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WisdomTree and SPDR is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Europe SmallCap and SPDR MSCI Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR 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 SPDR MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MSCI Emerging has no effect on the direction of WisdomTree Europe i.e., WisdomTree Europe and SPDR MSCI go up and down completely randomly.
Pair Corralation between WisdomTree Europe and SPDR MSCI
Considering the 90-day investment horizon WisdomTree Europe is expected to generate 1.2 times less return on investment than SPDR MSCI. But when comparing it to its historical volatility, WisdomTree Europe SmallCap is 1.14 times less risky than SPDR MSCI. It trades about 0.27 of its potential returns per unit of risk. SPDR MSCI Emerging is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 6,536 in SPDR MSCI Emerging on November 28, 2025 and sell it today you would earn a total of 982.00 from holding SPDR MSCI Emerging or generate 15.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Europe SmallCap vs. SPDR MSCI Emerging
Performance |
| Timeline |
| WisdomTree Europe |
| SPDR MSCI Emerging |
WisdomTree Europe and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Europe and SPDR MSCI
The main advantage of trading using opposite WisdomTree Europe and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Europe position performs unexpectedly, SPDR 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 SPDR MSCI will offset losses from the drop in SPDR 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 |
| SPDR MSCI vs. Hartford Multifactor Emerging | SPDR MSCI vs. MAYBANK EMERGING ETF | SPDR MSCI vs. iShares MSCI Norway | SPDR MSCI vs. Franklin FTSE Latin |
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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