Correlation Between WisdomTree Japan and WisdomTree Emerging
Can any of the company-specific risk be diversified away by investing in both WisdomTree Japan and WisdomTree Emerging 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 Emerging 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 Emerging Markets, you can compare the effects of market volatilities on WisdomTree Japan and WisdomTree Emerging 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 Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Japan and WisdomTree Emerging.
Diversification Opportunities for WisdomTree Japan and WisdomTree Emerging
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WisdomTree and WisdomTree is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Japan Hedged and WisdomTree Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Emerging 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 Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Emerging has no effect on the direction of WisdomTree Japan i.e., WisdomTree Japan and WisdomTree Emerging go up and down completely randomly.
Pair Corralation between WisdomTree Japan and WisdomTree Emerging
Considering the 90-day investment horizon WisdomTree Japan Hedged is expected to generate 1.07 times more return on investment than WisdomTree Emerging. However, WisdomTree Japan is 1.07 times more volatile than WisdomTree Emerging Markets. It trades about 0.29 of its potential returns per unit of risk. WisdomTree Emerging Markets is currently generating about 0.16 per unit of risk. If you would invest 13,458 in WisdomTree Japan Hedged on November 6, 2025 and sell it today you would earn a total of 2,546 from holding WisdomTree Japan Hedged or generate 18.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Japan Hedged vs. WisdomTree Emerging Markets
Performance |
| Timeline |
| WisdomTree Japan Hedged |
| WisdomTree Emerging |
WisdomTree Japan and WisdomTree Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Japan and WisdomTree Emerging
The main advantage of trading using opposite WisdomTree Japan and WisdomTree Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Japan position performs unexpectedly, WisdomTree Emerging 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 Emerging will offset losses from the drop in WisdomTree Emerging'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 |
| WisdomTree Emerging vs. Sprott Copper Miners | WisdomTree Emerging vs. The Hoya Capital | WisdomTree Emerging vs. Invesco SP SmallCap | WisdomTree Emerging vs. KraneShares Emerging Markets |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| 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 | |
| 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 |