Correlation Between WisdomTree Europe and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both WisdomTree Europe and ProShares UltraShort 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 UltraShort 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 UltraShort Real, you can compare the effects of market volatilities on WisdomTree Europe and ProShares UltraShort 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 UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Europe and ProShares UltraShort.
Diversification Opportunities for WisdomTree Europe and ProShares UltraShort
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WisdomTree and ProShares is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Europe SmallCap and ProShares UltraShort Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort Real 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 UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort Real has no effect on the direction of WisdomTree Europe i.e., WisdomTree Europe and ProShares UltraShort go up and down completely randomly.
Pair Corralation between WisdomTree Europe and ProShares UltraShort
Considering the 90-day investment horizon WisdomTree Europe SmallCap is expected to generate 0.46 times more return on investment than ProShares UltraShort. However, WisdomTree Europe SmallCap is 2.16 times less risky than ProShares UltraShort. It trades about 0.27 of its potential returns per unit of risk. ProShares UltraShort Real is currently generating about -0.09 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 873.11 from holding WisdomTree Europe SmallCap or generate 12.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Europe SmallCap vs. ProShares UltraShort Real
Performance |
| Timeline |
| WisdomTree Europe |
| ProShares UltraShort Real |
WisdomTree Europe and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Europe and ProShares UltraShort
The main advantage of trading using opposite WisdomTree Europe and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Europe position performs unexpectedly, ProShares UltraShort 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 UltraShort will offset losses from the drop in ProShares UltraShort'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 UltraShort vs. Direxion Daily 7 10 | ProShares UltraShort vs. Build Funds Trust | ProShares UltraShort vs. TCW Transform Supply | ProShares UltraShort vs. SPDR SP Kensho |
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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