Correlation Between WisdomTree Quality and IShares SMIM
Can any of the company-specific risk be diversified away by investing in both WisdomTree Quality and IShares SMIM 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 Quality and IShares SMIM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Quality Dividend and iShares SMIM ETF, you can compare the effects of market volatilities on WisdomTree Quality and IShares SMIM 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 Quality with a short position of IShares SMIM. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Quality and IShares SMIM.
Diversification Opportunities for WisdomTree Quality and IShares SMIM
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WisdomTree and IShares is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Quality Dividend and iShares SMIM ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SMIM ETF and WisdomTree Quality 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 Quality Dividend are associated (or correlated) with IShares SMIM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SMIM ETF has no effect on the direction of WisdomTree Quality i.e., WisdomTree Quality and IShares SMIM go up and down completely randomly.
Pair Corralation between WisdomTree Quality and IShares SMIM
Assuming the 90 days trading horizon WisdomTree Quality is expected to generate 1.95 times less return on investment than IShares SMIM. But when comparing it to its historical volatility, WisdomTree Quality Dividend is 1.25 times less risky than IShares SMIM. It trades about 0.13 of its potential returns per unit of risk. iShares SMIM ETF is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 30,060 in iShares SMIM ETF on November 15, 2025 and sell it today you would earn a total of 2,540 from holding iShares SMIM ETF or generate 8.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Quality Dividend vs. iShares SMIM ETF
Performance |
| Timeline |
| WisdomTree Quality |
| iShares SMIM ETF |
WisdomTree Quality and IShares SMIM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Quality and IShares SMIM
The main advantage of trading using opposite WisdomTree Quality and IShares SMIM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Quality position performs unexpectedly, IShares SMIM 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 IShares SMIM will offset losses from the drop in IShares SMIM's long position.| WisdomTree Quality vs. Xtrackers MSCI Europe | WisdomTree Quality vs. iShares VII PLC | WisdomTree Quality vs. Xtrackers MSCI Mexico |
| IShares SMIM vs. iShares Euro Dividend | IShares SMIM vs. iShares UK Dividend | IShares SMIM vs. iShares SP 500 | IShares SMIM vs. iShares SLI ETF |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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