Correlation Between WisdomTree International and Fidelity MSCI
Can any of the company-specific risk be diversified away by investing in both WisdomTree International and Fidelity MSCI 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 Fidelity MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree International Equity and Fidelity MSCI Consumer, you can compare the effects of market volatilities on WisdomTree International and Fidelity MSCI 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 Fidelity MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree International and Fidelity MSCI.
Diversification Opportunities for WisdomTree International and Fidelity MSCI
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WisdomTree and Fidelity is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree International Equit and Fidelity MSCI Consumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity MSCI Consumer 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 Equity are associated (or correlated) with Fidelity MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity MSCI Consumer has no effect on the direction of WisdomTree International i.e., WisdomTree International and Fidelity MSCI go up and down completely randomly.
Pair Corralation between WisdomTree International and Fidelity MSCI
Considering the 90-day investment horizon WisdomTree International is expected to generate 1.01 times less return on investment than Fidelity MSCI. But when comparing it to its historical volatility, WisdomTree International Equity is 1.17 times less risky than Fidelity MSCI. It trades about 0.32 of its potential returns per unit of risk. Fidelity MSCI Consumer is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 4,999 in Fidelity MSCI Consumer on November 30, 2025 and sell it today you would earn a total of 692.00 from holding Fidelity MSCI Consumer or generate 13.84% 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 Equit vs. Fidelity MSCI Consumer
Performance |
| Timeline |
| WisdomTree International |
| Fidelity MSCI Consumer |
WisdomTree International and Fidelity MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree International and Fidelity MSCI
The main advantage of trading using opposite WisdomTree International and Fidelity MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree International position performs unexpectedly, Fidelity MSCI 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 Fidelity MSCI will offset losses from the drop in Fidelity MSCI's long position.The idea behind WisdomTree International Equity and Fidelity MSCI Consumer 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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