Correlation Between Dimensional Emerging and WisdomTree Dynamic
Can any of the company-specific risk be diversified away by investing in both Dimensional Emerging and WisdomTree Dynamic 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 Emerging and WisdomTree Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dimensional Emerging Markets and WisdomTree Dynamic Currency, you can compare the effects of market volatilities on Dimensional Emerging and WisdomTree Dynamic 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 Emerging with a short position of WisdomTree Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional Emerging and WisdomTree Dynamic.
Diversification Opportunities for Dimensional Emerging and WisdomTree Dynamic
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dimensional and WisdomTree is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional Emerging Markets and WisdomTree Dynamic Currency in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Dynamic and Dimensional Emerging 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 Emerging Markets are associated (or correlated) with WisdomTree Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Dynamic has no effect on the direction of Dimensional Emerging i.e., Dimensional Emerging and WisdomTree Dynamic go up and down completely randomly.
Pair Corralation between Dimensional Emerging and WisdomTree Dynamic
Given the investment horizon of 90 days Dimensional Emerging is expected to generate 1.12 times less return on investment than WisdomTree Dynamic. In addition to that, Dimensional Emerging is 1.19 times more volatile than WisdomTree Dynamic Currency. It trades about 0.07 of its total potential returns per unit of risk. WisdomTree Dynamic Currency is currently generating about 0.1 per unit of volatility. If you would invest 3,401 in WisdomTree Dynamic Currency on October 11, 2025 and sell it today you would earn a total of 967.00 from holding WisdomTree Dynamic Currency or generate 28.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dimensional Emerging Markets vs. WisdomTree Dynamic Currency
Performance |
| Timeline |
| Dimensional Emerging |
| WisdomTree Dynamic |
Dimensional Emerging and WisdomTree Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dimensional Emerging and WisdomTree Dynamic
The main advantage of trading using opposite Dimensional Emerging and WisdomTree Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional Emerging position performs unexpectedly, WisdomTree Dynamic 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 Dynamic will offset losses from the drop in WisdomTree Dynamic's long position.| Dimensional Emerging vs. SPDR SP International | Dimensional Emerging vs. Elm Market Navigator | Dimensional Emerging vs. Davis Select Worldwide | Dimensional Emerging vs. Invesco DWA Developed |
| WisdomTree Dynamic vs. iShares MSCI Poland | WisdomTree Dynamic vs. iShares MSCI Emerging | WisdomTree Dynamic vs. Xtrackers MSCI Japan | WisdomTree Dynamic vs. iShares MSCI Japan |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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