Correlation Between WisdomTree Emerging and WisdomTree Short
Can any of the company-specific risk be diversified away by investing in both WisdomTree Emerging and WisdomTree Short 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 Short 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 Short Term Corporate, you can compare the effects of market volatilities on WisdomTree Emerging and WisdomTree Short 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 Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Emerging and WisdomTree Short.
Diversification Opportunities for WisdomTree Emerging and WisdomTree Short
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WisdomTree and WisdomTree is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Emerging Markets and WisdomTree Short Term Corporat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Short Term 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 Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Short Term has no effect on the direction of WisdomTree Emerging i.e., WisdomTree Emerging and WisdomTree Short go up and down completely randomly.
Pair Corralation between WisdomTree Emerging and WisdomTree Short
Given the investment horizon of 90 days WisdomTree Emerging is expected to generate 1.04 times less return on investment than WisdomTree Short. In addition to that, WisdomTree Emerging is 1.27 times more volatile than WisdomTree Short Term Corporate. It trades about 0.08 of its total potential returns per unit of risk. WisdomTree Short Term Corporate is currently generating about 0.11 per unit of volatility. If you would invest 4,594 in WisdomTree Short Term Corporate on October 29, 2025 and sell it today you would earn a total of 54.00 from holding WisdomTree Short Term Corporate or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Emerging Markets vs. WisdomTree Short Term Corporat
Performance |
| Timeline |
| WisdomTree Emerging |
| WisdomTree Short Term |
WisdomTree Emerging and WisdomTree Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Emerging and WisdomTree Short
The main advantage of trading using opposite WisdomTree Emerging and WisdomTree Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Emerging position performs unexpectedly, WisdomTree Short 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 Short will offset losses from the drop in WisdomTree Short'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 Short vs. WisdomTree High Yield | WisdomTree Short vs. SPDR Bloomberg Barclays | WisdomTree Short vs. WisdomTree Europe SmallCap | WisdomTree Short vs. WisdomTree Corporate Bond |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |