Correlation Between WisdomTree Emerging and WisdomTree Interest
Can any of the company-specific risk be diversified away by investing in both WisdomTree Emerging and WisdomTree Interest 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 Emerging and WisdomTree Interest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Emerging Markets and WisdomTree Interest Rate, you can compare the effects of market volatilities on WisdomTree Emerging and WisdomTree Interest 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 Emerging with a short position of WisdomTree Interest. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Emerging and WisdomTree Interest.
Diversification Opportunities for WisdomTree Emerging and WisdomTree Interest
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WisdomTree and WisdomTree is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Emerging Markets and WisdomTree Interest Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Interest Rate and WisdomTree Emerging 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 Emerging Markets are associated (or correlated) with WisdomTree Interest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Interest Rate has no effect on the direction of WisdomTree Emerging i.e., WisdomTree Emerging and WisdomTree Interest go up and down completely randomly.
Pair Corralation between WisdomTree Emerging and WisdomTree Interest
Given the investment horizon of 90 days WisdomTree Emerging Markets is expected to generate 1.28 times more return on investment than WisdomTree Interest. However, WisdomTree Emerging is 1.28 times more volatile than WisdomTree Interest Rate. It trades about 0.13 of its potential returns per unit of risk. WisdomTree Interest Rate is currently generating about 0.08 per unit of risk. If you would invest 6,644 in WisdomTree Emerging Markets on October 10, 2025 and sell it today you would earn a total of 48.00 from holding WisdomTree Emerging Markets or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Emerging Markets vs. WisdomTree Interest Rate
Performance |
| Timeline |
| WisdomTree Emerging |
| WisdomTree Interest Rate |
WisdomTree Emerging and WisdomTree Interest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Emerging and WisdomTree Interest
The main advantage of trading using opposite WisdomTree Emerging and WisdomTree Interest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Emerging position performs unexpectedly, WisdomTree Interest 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 Interest will offset losses from the drop in WisdomTree Interest's long position.| WisdomTree Emerging vs. Return Stacked Bonds | WisdomTree Emerging vs. Columbia Short Duration | WisdomTree Emerging vs. iShares Inflation Hedged | WisdomTree Emerging vs. NuShares ETF Trust |
| WisdomTree Interest vs. WisdomTree Yield Enhanced | WisdomTree Interest vs. Nuveen ESG High | WisdomTree Interest vs. Columbia Short Duration | WisdomTree Interest vs. iShares Inflation Hedged |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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