Correlation Between WisdomTree Japan and Defiance Leveraged
Can any of the company-specific risk be diversified away by investing in both WisdomTree Japan and Defiance Leveraged 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 Defiance Leveraged 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 Defiance Leveraged Long, you can compare the effects of market volatilities on WisdomTree Japan and Defiance Leveraged 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 Defiance Leveraged. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Japan and Defiance Leveraged.
Diversification Opportunities for WisdomTree Japan and Defiance Leveraged
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WisdomTree and Defiance is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Japan Hedged and Defiance Leveraged Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defiance Leveraged Long 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 Defiance Leveraged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defiance Leveraged Long has no effect on the direction of WisdomTree Japan i.e., WisdomTree Japan and Defiance Leveraged go up and down completely randomly.
Pair Corralation between WisdomTree Japan and Defiance Leveraged
Considering the 90-day investment horizon WisdomTree Japan Hedged is expected to generate 0.11 times more return on investment than Defiance Leveraged. However, WisdomTree Japan Hedged is 9.04 times less risky than Defiance Leveraged. It trades about 0.2 of its potential returns per unit of risk. Defiance Leveraged Long is currently generating about -0.06 per unit of risk. If you would invest 14,013 in WisdomTree Japan Hedged on December 4, 2025 and sell it today you would earn a total of 2,068 from holding WisdomTree Japan Hedged or generate 14.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.36% |
| Values | Daily Returns |
WisdomTree Japan Hedged vs. Defiance Leveraged Long
Performance |
| Timeline |
| WisdomTree Japan Hedged |
| Defiance Leveraged Long |
WisdomTree Japan and Defiance Leveraged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Japan and Defiance Leveraged
The main advantage of trading using opposite WisdomTree Japan and Defiance Leveraged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Japan position performs unexpectedly, Defiance Leveraged 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 Defiance Leveraged will offset losses from the drop in Defiance Leveraged's long position.| WisdomTree Japan vs. Pacer Small Cap | WisdomTree Japan vs. WisdomTree MidCap Dividend | WisdomTree Japan vs. iShares Financials ETF | WisdomTree Japan vs. SPDR SP 600 |
| Defiance Leveraged vs. Morningstar Unconstrained Allocation | Defiance Leveraged vs. Thrivent High Yield | Defiance Leveraged vs. Via Renewables | Defiance Leveraged vs. T Rowe Price |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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