Correlation Between WisdomTree International and Invesco SP
Can any of the company-specific risk be diversified away by investing in both WisdomTree International and Invesco SP 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 International and Invesco SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree International SmallCap and Invesco SP Global, you can compare the effects of market volatilities on WisdomTree International and Invesco SP 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 International with a short position of Invesco SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree International and Invesco SP.
Diversification Opportunities for WisdomTree International and Invesco SP
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WisdomTree and Invesco is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree International Small and Invesco SP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco SP Global and WisdomTree International 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 International SmallCap are associated (or correlated) with Invesco SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco SP Global has no effect on the direction of WisdomTree International i.e., WisdomTree International and Invesco SP go up and down completely randomly.
Pair Corralation between WisdomTree International and Invesco SP
Considering the 90-day investment horizon WisdomTree International SmallCap is expected to generate 0.89 times more return on investment than Invesco SP. However, WisdomTree International SmallCap is 1.13 times less risky than Invesco SP. It trades about 0.12 of its potential returns per unit of risk. Invesco SP Global is currently generating about 0.04 per unit of risk. If you would invest 7,342 in WisdomTree International SmallCap on October 3, 2025 and sell it today you would earn a total of 759.00 from holding WisdomTree International SmallCap or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree International Small vs. Invesco SP Global
Performance |
| Timeline |
| WisdomTree International |
| Invesco SP Global |
WisdomTree International and Invesco SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree International and Invesco SP
The main advantage of trading using opposite WisdomTree International and Invesco SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree International position performs unexpectedly, Invesco SP 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 SP will offset losses from the drop in Invesco SP's long position.The idea behind WisdomTree International SmallCap and Invesco SP Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Invesco SP vs. Invesco High Yield | Invesco SP vs. iShares Energy ETF | Invesco SP vs. iShares Micro Cap ETF | Invesco SP vs. Invesco SP MidCap |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |