Correlation Between WisdomTree Emerging and Invesco Exchange
Can any of the company-specific risk be diversified away by investing in both WisdomTree Emerging and Invesco Exchange 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 Exchange 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 Exchange Traded, you can compare the effects of market volatilities on WisdomTree Emerging and Invesco Exchange 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 Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Emerging and Invesco Exchange.
Diversification Opportunities for WisdomTree Emerging and Invesco Exchange
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WisdomTree and Invesco is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Emerging Markets and Invesco Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Exchange Traded 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 Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Exchange Traded has no effect on the direction of WisdomTree Emerging i.e., WisdomTree Emerging and Invesco Exchange go up and down completely randomly.
Pair Corralation between WisdomTree Emerging and Invesco Exchange
Considering the 90-day investment horizon WisdomTree Emerging is expected to generate 1.74 times less return on investment than Invesco Exchange. But when comparing it to its historical volatility, WisdomTree Emerging Markets is 1.05 times less risky than Invesco Exchange. It trades about 0.11 of its potential returns per unit of risk. Invesco Exchange Traded is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 3,067 in Invesco Exchange Traded on September 29, 2025 and sell it today you would earn a total of 60.00 from holding Invesco Exchange Traded or generate 1.96% 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 Exchange Traded
Performance |
| Timeline |
| WisdomTree Emerging |
| Invesco Exchange Traded |
WisdomTree Emerging and Invesco Exchange Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Emerging and Invesco Exchange
The main advantage of trading using opposite WisdomTree Emerging and Invesco Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Emerging position performs unexpectedly, Invesco Exchange 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 Exchange will offset losses from the drop in Invesco Exchange's long position.| WisdomTree Emerging vs. WisdomTree SmallCap Dividend | WisdomTree Emerging vs. Freedom 100 Emerging | WisdomTree Emerging vs. WisdomTree High Dividend | WisdomTree Emerging vs. Invesco FTSE RAFI |
| Invesco Exchange vs. Invesco Exchange Traded | Invesco Exchange vs. iShares MSCI USA | Invesco Exchange vs. Goldman Sachs ActiveBeta | Invesco Exchange vs. Vanguard SP Mid Cap |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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