Correlation Between Global X and WisdomTree Emerging
Can any of the company-specific risk be diversified away by investing in both Global X 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 Global X and WisdomTree Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Funds and WisdomTree Emerging Markets, you can compare the effects of market volatilities on Global X 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 Global X with a short position of WisdomTree Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and WisdomTree Emerging.
Diversification Opportunities for Global X and WisdomTree Emerging
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Global and WisdomTree is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and WisdomTree Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Emerging and Global X 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 Global X Funds 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 Global X i.e., Global X and WisdomTree Emerging go up and down completely randomly.
Pair Corralation between Global X and WisdomTree Emerging
Considering the 90-day investment horizon Global X Funds is expected to under-perform the WisdomTree Emerging. In addition to that, Global X is 1.09 times more volatile than WisdomTree Emerging Markets. It trades about -0.17 of its total potential returns per unit of risk. WisdomTree Emerging Markets is currently generating about -0.06 per unit of volatility. If you would invest 2,750 in WisdomTree Emerging Markets on September 4, 2024 and sell it today you would lose (29.00) from holding WisdomTree Emerging Markets or give up 1.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Funds vs. WisdomTree Emerging Markets
Performance |
| Timeline |
| Global X Funds |
| WisdomTree Emerging |
Global X and WisdomTree Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and WisdomTree Emerging
The main advantage of trading using opposite Global X and WisdomTree Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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.| Global X vs. iShares Dividend and | Global X vs. Martin Currie Sustainable | Global X vs. VictoryShares THB Mid | Global X vs. Mast Global Battery |
| WisdomTree Emerging vs. WisdomTree International Multifactor | WisdomTree Emerging vs. WisdomTree Europe Quality | WisdomTree Emerging vs. PIMCO RAFI Dynamic | WisdomTree Emerging vs. SPDR MSCI Emerging |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |