Correlation Between WisdomTree International and SPDR Portfolio
Can any of the company-specific risk be diversified away by investing in both WisdomTree International and SPDR Portfolio 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 SPDR Portfolio 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 SPDR Portfolio TIPS, you can compare the effects of market volatilities on WisdomTree International and SPDR Portfolio 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 SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree International and SPDR Portfolio.
Diversification Opportunities for WisdomTree International and SPDR Portfolio
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WisdomTree and SPDR is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree International Small and SPDR Portfolio TIPS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio TIPS 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 SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio TIPS has no effect on the direction of WisdomTree International i.e., WisdomTree International and SPDR Portfolio go up and down completely randomly.
Pair Corralation between WisdomTree International and SPDR Portfolio
Considering the 90-day investment horizon WisdomTree International SmallCap is expected to generate 2.91 times more return on investment than SPDR Portfolio. However, WisdomTree International is 2.91 times more volatile than SPDR Portfolio TIPS. It trades about 0.38 of its potential returns per unit of risk. SPDR Portfolio TIPS is currently generating about 0.0 per unit of risk. If you would invest 7,853 in WisdomTree International SmallCap on September 30, 2025 and sell it today you would earn a total of 247.00 from holding WisdomTree International SmallCap or generate 3.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree International Small vs. SPDR Portfolio TIPS
Performance |
| Timeline |
| WisdomTree International |
| SPDR Portfolio TIPS |
WisdomTree International and SPDR Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree International and SPDR Portfolio
The main advantage of trading using opposite WisdomTree International and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree International position performs unexpectedly, SPDR Portfolio 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 SPDR Portfolio will offset losses from the drop in SPDR Portfolio's long position.The idea behind WisdomTree International SmallCap and SPDR Portfolio TIPS 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.
| SPDR Portfolio vs. FlexShares iBoxx 5 Year | SPDR Portfolio vs. iShares Micro Cap ETF | SPDR Portfolio vs. WisdomTree International SmallCap | SPDR Portfolio vs. iShares Energy 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |