Correlation Between WisdomTree International and Day HaganNed
Can any of the company-specific risk be diversified away by investing in both WisdomTree International and Day HaganNed 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 Day HaganNed 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 Day HaganNed Davis, you can compare the effects of market volatilities on WisdomTree International and Day HaganNed 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 Day HaganNed. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree International and Day HaganNed.
Diversification Opportunities for WisdomTree International and Day HaganNed
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WisdomTree and Day is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree International Equit and Day HaganNed Davis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Day HaganNed Davis 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 Day HaganNed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Day HaganNed Davis has no effect on the direction of WisdomTree International i.e., WisdomTree International and Day HaganNed go up and down completely randomly.
Pair Corralation between WisdomTree International and Day HaganNed
Considering the 90-day investment horizon WisdomTree International Equity is expected to generate 0.81 times more return on investment than Day HaganNed. However, WisdomTree International Equity is 1.23 times less risky than Day HaganNed. It trades about 0.57 of its potential returns per unit of risk. Day HaganNed Davis is currently generating about 0.23 per unit of risk. If you would invest 6,789 in WisdomTree International Equity on October 19, 2025 and sell it today you would earn a total of 306.00 from holding WisdomTree International Equity or generate 4.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree International Equit vs. Day HaganNed Davis
Performance |
| Timeline |
| WisdomTree International |
| Day HaganNed Davis |
WisdomTree International and Day HaganNed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree International and Day HaganNed
The main advantage of trading using opposite WisdomTree International and Day HaganNed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree International position performs unexpectedly, Day HaganNed 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 Day HaganNed will offset losses from the drop in Day HaganNed's long position.The idea behind WisdomTree International Equity and Day HaganNed Davis 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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