Correlation Between WisdomTree Japan and WisdomTree Japan
Can any of the company-specific risk be diversified away by investing in both WisdomTree Japan and WisdomTree Japan 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 Japan and WisdomTree Japan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Japan Hedged and WisdomTree Japan Hedged, you can compare the effects of market volatilities on WisdomTree Japan and WisdomTree Japan 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 Japan with a short position of WisdomTree Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Japan and WisdomTree Japan.
Diversification Opportunities for WisdomTree Japan and WisdomTree Japan
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WisdomTree and WisdomTree is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Japan Hedged and WisdomTree Japan Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Japan Hedged and WisdomTree Japan 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 Japan Hedged are associated (or correlated) with WisdomTree Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Japan Hedged has no effect on the direction of WisdomTree Japan i.e., WisdomTree Japan and WisdomTree Japan go up and down completely randomly.
Pair Corralation between WisdomTree Japan and WisdomTree Japan
Considering the 90-day investment horizon WisdomTree Japan Hedged is expected to generate 1.02 times more return on investment than WisdomTree Japan. However, WisdomTree Japan is 1.02 times more volatile than WisdomTree Japan Hedged. It trades about 0.32 of its potential returns per unit of risk. WisdomTree Japan Hedged is currently generating about 0.31 per unit of risk. If you would invest 13,755 in WisdomTree Japan Hedged on November 23, 2025 and sell it today you would earn a total of 2,908 from holding WisdomTree Japan Hedged or generate 21.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 75.0% |
| Values | Daily Returns |
WisdomTree Japan Hedged vs. WisdomTree Japan Hedged
Performance |
| Timeline |
| WisdomTree Japan Hedged |
| WisdomTree Japan Hedged |
Risk-Adjusted Performance
Solid
Weak | Strong |
WisdomTree Japan and WisdomTree Japan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Japan and WisdomTree Japan
The main advantage of trading using opposite WisdomTree Japan and WisdomTree Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Japan position performs unexpectedly, WisdomTree Japan 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 WisdomTree Japan will offset losses from the drop in WisdomTree Japan's long position.| WisdomTree Japan vs. Vanguard Financials Index | WisdomTree Japan vs. Vanguard Russell 2000 | WisdomTree Japan vs. SPDR Russell Small | WisdomTree Japan vs. Dimensional International Value |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |