Correlation Between Dimensional ETF and WisdomTree Emerging
Can any of the company-specific risk be diversified away by investing in both Dimensional ETF and WisdomTree Emerging 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 Dimensional ETF and WisdomTree Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dimensional ETF Trust and WisdomTree Emerging Markets, you can compare the effects of market volatilities on Dimensional ETF and WisdomTree Emerging 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 Dimensional ETF with a short position of WisdomTree Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional ETF and WisdomTree Emerging.
Diversification Opportunities for Dimensional ETF and WisdomTree Emerging
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dimensional and WisdomTree is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional ETF Trust and WisdomTree Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Emerging and Dimensional ETF 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 Dimensional ETF Trust are associated (or correlated) with WisdomTree Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Emerging has no effect on the direction of Dimensional ETF i.e., Dimensional ETF and WisdomTree Emerging go up and down completely randomly.
Pair Corralation between Dimensional ETF and WisdomTree Emerging
Given the investment horizon of 90 days Dimensional ETF is expected to generate 8.96 times less return on investment than WisdomTree Emerging. But when comparing it to its historical volatility, Dimensional ETF Trust is 7.31 times less risky than WisdomTree Emerging. It trades about 0.28 of its potential returns per unit of risk. WisdomTree Emerging Markets is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 5,566 in WisdomTree Emerging Markets on November 18, 2025 and sell it today you would earn a total of 796.00 from holding WisdomTree Emerging Markets or generate 14.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
Dimensional ETF Trust vs. WisdomTree Emerging Markets
Performance |
| Timeline |
| Dimensional ETF Trust |
| WisdomTree Emerging |
Dimensional ETF and WisdomTree Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dimensional ETF and WisdomTree Emerging
The main advantage of trading using opposite Dimensional ETF and WisdomTree Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional ETF position performs unexpectedly, WisdomTree Emerging 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 WisdomTree Emerging will offset losses from the drop in WisdomTree Emerging's long position.| Dimensional ETF vs. Janus Detroit Street | Dimensional ETF vs. KraneShares California Carbon | Dimensional ETF vs. WisdomTree Emerging Markets | Dimensional ETF vs. Avantis International Small |
| WisdomTree Emerging vs. WisdomTree SmallCap Dividend | WisdomTree Emerging vs. Freedom 100 Emerging | WisdomTree Emerging vs. WisdomTree High Dividend | WisdomTree Emerging vs. Invesco FTSE RAFI |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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