Correlation Between WisdomTree Japan and Invesco Global
Can any of the company-specific risk be diversified away by investing in both WisdomTree Japan and Invesco Global 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 Japan and Invesco Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Japan SmallCap and Invesco Global Listed, you can compare the effects of market volatilities on WisdomTree Japan and Invesco Global 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 Japan with a short position of Invesco Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Japan and Invesco Global.
Diversification Opportunities for WisdomTree Japan and Invesco Global
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WisdomTree and Invesco is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Japan SmallCap and Invesco Global Listed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Global Listed and WisdomTree Japan 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 Japan SmallCap are associated (or correlated) with Invesco Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Global Listed has no effect on the direction of WisdomTree Japan i.e., WisdomTree Japan and Invesco Global go up and down completely randomly.
Pair Corralation between WisdomTree Japan and Invesco Global
Considering the 90-day investment horizon WisdomTree Japan SmallCap is expected to generate 0.66 times more return on investment than Invesco Global. However, WisdomTree Japan SmallCap is 1.51 times less risky than Invesco Global. It trades about 0.14 of its potential returns per unit of risk. Invesco Global Listed is currently generating about 0.02 per unit of risk. If you would invest 7,238 in WisdomTree Japan SmallCap on October 16, 2025 and sell it today you would earn a total of 2,750 from holding WisdomTree Japan SmallCap or generate 37.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
WisdomTree Japan SmallCap vs. Invesco Global Listed
Performance |
| Timeline |
| WisdomTree Japan SmallCap |
| Invesco Global Listed |
WisdomTree Japan and Invesco Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Japan and Invesco Global
The main advantage of trading using opposite WisdomTree Japan and Invesco Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Japan position performs unexpectedly, Invesco Global 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 Invesco Global will offset losses from the drop in Invesco Global's long position.| WisdomTree Japan vs. WisdomTree SmallCap Quality | WisdomTree Japan vs. iShares MSCI Indonesia | WisdomTree Japan vs. WisdomTree Cloud Computing | WisdomTree Japan vs. Davis Select Financial |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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