Correlation Between WisdomTree International and Vanguard Global
Can any of the company-specific risk be diversified away by investing in both WisdomTree International and Vanguard 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 International and Vanguard Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree International LargeCap and Vanguard Global Wellesley, you can compare the effects of market volatilities on WisdomTree International and Vanguard 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 International with a short position of Vanguard Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree International and Vanguard Global.
Diversification Opportunities for WisdomTree International and Vanguard Global
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WisdomTree and Vanguard is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree International Large and Vanguard Global Wellesley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Global Wellesley 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 LargeCap are associated (or correlated) with Vanguard Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Global Wellesley has no effect on the direction of WisdomTree International i.e., WisdomTree International and Vanguard Global go up and down completely randomly.
Pair Corralation between WisdomTree International and Vanguard Global
Considering the 90-day investment horizon WisdomTree International LargeCap is expected to generate 2.62 times more return on investment than Vanguard Global. However, WisdomTree International is 2.62 times more volatile than Vanguard Global Wellesley. It trades about 0.2 of its potential returns per unit of risk. Vanguard Global Wellesley is currently generating about 0.21 per unit of risk. If you would invest 6,273 in WisdomTree International LargeCap on October 24, 2025 and sell it today you would earn a total of 537.00 from holding WisdomTree International LargeCap or generate 8.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree International Large vs. Vanguard Global Wellesley
Performance |
| Timeline |
| WisdomTree International |
| Vanguard Global Wellesley |
WisdomTree International and Vanguard Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree International and Vanguard Global
The main advantage of trading using opposite WisdomTree International and Vanguard Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree International position performs unexpectedly, Vanguard 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 Vanguard Global will offset losses from the drop in Vanguard Global's long position.The idea behind WisdomTree International LargeCap and Vanguard Global Wellesley 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.
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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