Correlation Between WisdomTree Emerging and Invesco DWA
Can any of the company-specific risk be diversified away by investing in both WisdomTree Emerging and Invesco DWA 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 Emerging and Invesco DWA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Emerging Markets and Invesco DWA Emerging, you can compare the effects of market volatilities on WisdomTree Emerging and Invesco DWA 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 Emerging with a short position of Invesco DWA. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Emerging and Invesco DWA.
Diversification Opportunities for WisdomTree Emerging and Invesco DWA
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WisdomTree and Invesco is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Emerging Markets and Invesco DWA Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco DWA Emerging and WisdomTree 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 WisdomTree Emerging Markets are associated (or correlated) with Invesco DWA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco DWA Emerging has no effect on the direction of WisdomTree Emerging i.e., WisdomTree Emerging and Invesco DWA go up and down completely randomly.
Pair Corralation between WisdomTree Emerging and Invesco DWA
Given the investment horizon of 90 days WisdomTree Emerging Markets is expected to generate 0.77 times more return on investment than Invesco DWA. However, WisdomTree Emerging Markets is 1.29 times less risky than Invesco DWA. It trades about 0.34 of its potential returns per unit of risk. Invesco DWA Emerging is currently generating about 0.13 per unit of risk. If you would invest 3,061 in WisdomTree Emerging Markets on October 11, 2025 and sell it today you would earn a total of 182.00 from holding WisdomTree Emerging Markets or generate 5.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Emerging Markets vs. Invesco DWA Emerging
Performance |
| Timeline |
| WisdomTree Emerging |
| Invesco DWA Emerging |
WisdomTree Emerging and Invesco DWA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Emerging and Invesco DWA
The main advantage of trading using opposite WisdomTree Emerging and Invesco DWA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Emerging position performs unexpectedly, Invesco DWA 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 DWA will offset losses from the drop in Invesco DWA's long position.| WisdomTree Emerging vs. WisdomTree Emerging Markets | WisdomTree Emerging vs. First Trust RiverFront | WisdomTree Emerging vs. KraneShares California Carbon | WisdomTree Emerging vs. First Trust Small |
| Invesco DWA vs. WisdomTree Global High | Invesco DWA vs. TrueShares Active Yield | Invesco DWA vs. First Trust Multi | Invesco DWA vs. iShares MSCI China |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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