Correlation Between WisdomTree Europe and ProShares Short
Can any of the company-specific risk be diversified away by investing in both WisdomTree Europe and ProShares Short 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 Short 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 Short Russell2000, you can compare the effects of market volatilities on WisdomTree Europe and ProShares Short 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 Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Europe and ProShares Short.
Diversification Opportunities for WisdomTree Europe and ProShares Short
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WisdomTree and ProShares is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Europe SmallCap and ProShares Short Russell2000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Short Russ 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 Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Short Russ has no effect on the direction of WisdomTree Europe i.e., WisdomTree Europe and ProShares Short go up and down completely randomly.
Pair Corralation between WisdomTree Europe and ProShares Short
Considering the 90-day investment horizon WisdomTree Europe SmallCap is expected to generate 0.69 times more return on investment than ProShares Short. However, WisdomTree Europe SmallCap is 1.46 times less risky than ProShares Short. It trades about 0.27 of its potential returns per unit of risk. ProShares Short Russell2000 is currently generating about -0.08 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 Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Europe SmallCap vs. ProShares Short Russell2000
Performance |
| Timeline |
| WisdomTree Europe |
| ProShares Short Russ |
WisdomTree Europe and ProShares Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Europe and ProShares Short
The main advantage of trading using opposite WisdomTree Europe and ProShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Europe position performs unexpectedly, ProShares Short 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 Short will offset losses from the drop in ProShares Short'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 Short vs. ProShares Short Dow30 | ProShares Short vs. Direxion Daily MSCI | ProShares Short vs. ClearShares Ultra Short Maturity | ProShares Short vs. Direxion Daily Select |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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