Correlation Between WisdomTree SmallCap and Invesco Global
Can any of the company-specific risk be diversified away by investing in both WisdomTree SmallCap 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 SmallCap 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 SmallCap Quality and Invesco Global Listed, you can compare the effects of market volatilities on WisdomTree SmallCap 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 SmallCap with a short position of Invesco Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree SmallCap and Invesco Global.
Diversification Opportunities for WisdomTree SmallCap and Invesco Global
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WisdomTree and Invesco is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree SmallCap Quality 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 SmallCap 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 SmallCap Quality 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 SmallCap i.e., WisdomTree SmallCap and Invesco Global go up and down completely randomly.
Pair Corralation between WisdomTree SmallCap and Invesco Global
Given the investment horizon of 90 days WisdomTree SmallCap Quality is expected to generate 0.88 times more return on investment than Invesco Global. However, WisdomTree SmallCap Quality is 1.13 times less risky than Invesco Global. It trades about 0.26 of its potential returns per unit of risk. Invesco Global Listed is currently generating about 0.04 per unit of risk. If you would invest 5,057 in WisdomTree SmallCap Quality on October 23, 2025 and sell it today you would earn a total of 290.50 from holding WisdomTree SmallCap Quality or generate 5.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree SmallCap Quality vs. Invesco Global Listed
Performance |
| Timeline |
| WisdomTree SmallCap |
| Invesco Global Listed |
WisdomTree SmallCap and Invesco Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree SmallCap and Invesco Global
The main advantage of trading using opposite WisdomTree SmallCap and Invesco Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree SmallCap 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 SmallCap vs. WisdomTree Japan SmallCap | WisdomTree SmallCap vs. iShares MSCI Sweden | WisdomTree SmallCap vs. iShares MSCI Emerging | WisdomTree SmallCap vs. JPMorgan Diversified Return |
| Invesco Global vs. Global X MSCI | Invesco Global vs. Invesco FTSE RAFI | Invesco Global vs. Global X Blockchain | Invesco Global vs. Global X DAX |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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