Correlation Between WisdomTree MidCap and Dimensional ETF
Can any of the company-specific risk be diversified away by investing in both WisdomTree MidCap and Dimensional ETF 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 MidCap and Dimensional ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree MidCap Dividend and Dimensional ETF Trust, you can compare the effects of market volatilities on WisdomTree MidCap and Dimensional ETF 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 MidCap with a short position of Dimensional ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree MidCap and Dimensional ETF.
Diversification Opportunities for WisdomTree MidCap and Dimensional ETF
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WisdomTree and Dimensional is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree MidCap Dividend and Dimensional ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional ETF Trust and WisdomTree MidCap 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 MidCap Dividend are associated (or correlated) with Dimensional ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional ETF Trust has no effect on the direction of WisdomTree MidCap i.e., WisdomTree MidCap and Dimensional ETF go up and down completely randomly.
Pair Corralation between WisdomTree MidCap and Dimensional ETF
Considering the 90-day investment horizon WisdomTree MidCap is expected to generate 2.04 times less return on investment than Dimensional ETF. In addition to that, WisdomTree MidCap is 1.18 times more volatile than Dimensional ETF Trust. It trades about 0.23 of its total potential returns per unit of risk. Dimensional ETF Trust is currently generating about 0.56 per unit of volatility. If you would invest 3,082 in Dimensional ETF Trust on September 25, 2025 and sell it today you would earn a total of 217.00 from holding Dimensional ETF Trust or generate 7.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
WisdomTree MidCap Dividend vs. Dimensional ETF Trust
Performance |
| Timeline |
| WisdomTree MidCap |
| Dimensional ETF Trust |
WisdomTree MidCap and Dimensional ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree MidCap and Dimensional ETF
The main advantage of trading using opposite WisdomTree MidCap and Dimensional ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree MidCap position performs unexpectedly, Dimensional ETF 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 Dimensional ETF will offset losses from the drop in Dimensional ETF's long position.| WisdomTree MidCap vs. WisdomTree Emerging Markets | WisdomTree MidCap vs. WisdomTree Japan Hedged | WisdomTree MidCap vs. iShares Financials ETF | WisdomTree MidCap vs. iShares Exponential Technologies |
| Dimensional ETF vs. Dimensional International High | Dimensional ETF vs. Dimensional ETF Trust | Dimensional ETF vs. SPDR SP 600 | Dimensional ETF vs. Pacer Small 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |