Correlation Between WisdomTree Japan and SPDR Portfolio
Can any of the company-specific risk be diversified away by investing in both WisdomTree Japan and SPDR Portfolio 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 SPDR Portfolio 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 SPDR Portfolio SP, you can compare the effects of market volatilities on WisdomTree Japan and SPDR Portfolio 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 SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Japan and SPDR Portfolio.
Diversification Opportunities for WisdomTree Japan and SPDR Portfolio
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WisdomTree and SPDR is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Japan Hedged and SPDR Portfolio SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio SP 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 SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio SP has no effect on the direction of WisdomTree Japan i.e., WisdomTree Japan and SPDR Portfolio go up and down completely randomly.
Pair Corralation between WisdomTree Japan and SPDR Portfolio
Considering the 90-day investment horizon WisdomTree Japan Hedged is expected to generate 1.94 times more return on investment than SPDR Portfolio. However, WisdomTree Japan is 1.94 times more volatile than SPDR Portfolio SP. It trades about 0.21 of its potential returns per unit of risk. SPDR Portfolio SP is currently generating about 0.13 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 2,224 from holding WisdomTree Japan Hedged or generate 15.87% 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. SPDR Portfolio SP
Performance |
| Timeline |
| WisdomTree Japan Hedged |
| SPDR Portfolio SP |
WisdomTree Japan and SPDR Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Japan and SPDR Portfolio
The main advantage of trading using opposite WisdomTree Japan and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Japan position performs unexpectedly, SPDR Portfolio 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 SPDR Portfolio will offset losses from the drop in SPDR Portfolio'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 |
| SPDR Portfolio vs. SPDR SP World | SPDR Portfolio vs. Vanguard Institutional Total | SPDR Portfolio vs. Vanguard Mid Cap Value | SPDR Portfolio vs. Consumer Discretionary Select |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |