Correlation Between WisdomTree Japan and Main Thematic
Can any of the company-specific risk be diversified away by investing in both WisdomTree Japan and Main Thematic 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 Main Thematic 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 Main Thematic Innovation, you can compare the effects of market volatilities on WisdomTree Japan and Main Thematic 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 Main Thematic. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Japan and Main Thematic.
Diversification Opportunities for WisdomTree Japan and Main Thematic
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WisdomTree and Main is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Japan Hedged and Main Thematic Innovation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Main Thematic Innovation 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 Main Thematic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Main Thematic Innovation has no effect on the direction of WisdomTree Japan i.e., WisdomTree Japan and Main Thematic go up and down completely randomly.
Pair Corralation between WisdomTree Japan and Main Thematic
Considering the 90-day investment horizon WisdomTree Japan Hedged is expected to generate 0.74 times more return on investment than Main Thematic. However, WisdomTree Japan Hedged is 1.35 times less risky than Main Thematic. It trades about 0.33 of its potential returns per unit of risk. Main Thematic Innovation is currently generating about -0.03 per unit of risk. If you would invest 13,906 in WisdomTree Japan Hedged on November 29, 2025 and sell it today you would earn a total of 3,050 from holding WisdomTree Japan Hedged or generate 21.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Japan Hedged vs. Main Thematic Innovation
Performance |
| Timeline |
| WisdomTree Japan Hedged |
| Main Thematic Innovation |
WisdomTree Japan and Main Thematic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Japan and Main Thematic
The main advantage of trading using opposite WisdomTree Japan and Main Thematic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Japan position performs unexpectedly, Main Thematic 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 Main Thematic will offset losses from the drop in Main Thematic'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 |
| Main Thematic vs. First Trust Emerging | Main Thematic vs. First Trust Exchange Traded | Main Thematic vs. First Trust Exchange Traded | Main Thematic vs. Series Portfolios Trust |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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