Correlation Between WisdomTree Japan and TCW Strategic
Can any of the company-specific risk be diversified away by investing in both WisdomTree Japan and TCW Strategic 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 TCW Strategic 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 TCW Strategic Income, you can compare the effects of market volatilities on WisdomTree Japan and TCW Strategic 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 TCW Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Japan and TCW Strategic.
Diversification Opportunities for WisdomTree Japan and TCW Strategic
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WisdomTree and TCW is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Japan Hedged and TCW Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TCW Strategic Income 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 TCW Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TCW Strategic Income has no effect on the direction of WisdomTree Japan i.e., WisdomTree Japan and TCW Strategic go up and down completely randomly.
Pair Corralation between WisdomTree Japan and TCW Strategic
Given the investment horizon of 90 days WisdomTree Japan Hedged is expected to generate 2.35 times more return on investment than TCW Strategic. However, WisdomTree Japan is 2.35 times more volatile than TCW Strategic Income. It trades about 0.27 of its potential returns per unit of risk. TCW Strategic Income is currently generating about 0.05 per unit of risk. If you would invest 4,238 in WisdomTree Japan Hedged on November 4, 2025 and sell it today you would earn a total of 764.00 from holding WisdomTree Japan Hedged or generate 18.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.16% |
| Values | Daily Returns |
WisdomTree Japan Hedged vs. TCW Strategic Income
Performance |
| Timeline |
| WisdomTree Japan Hedged |
| TCW Strategic Income |
WisdomTree Japan and TCW Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Japan and TCW Strategic
The main advantage of trading using opposite WisdomTree Japan and TCW Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Japan position performs unexpectedly, TCW Strategic 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 TCW Strategic will offset losses from the drop in TCW Strategic's long position.| WisdomTree Japan vs. WisdomTree Europe Hedged | WisdomTree Japan vs. Global X MSCI | WisdomTree Japan vs. iShares Fixed Income | WisdomTree Japan vs. iShares MSCI Global |
| TCW Strategic vs. Cohen and Steers | TCW Strategic vs. Lazard Global Total | TCW Strategic vs. Nuveen Real Estate | TCW Strategic vs. Cohen Steers Real |
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.
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