Correlation Between WisdomTree MidCap and WisdomTree International
Can any of the company-specific risk be diversified away by investing in both WisdomTree MidCap and WisdomTree International 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 MidCap and WisdomTree International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree MidCap Earnings and WisdomTree International High, you can compare the effects of market volatilities on WisdomTree MidCap and WisdomTree International 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 MidCap with a short position of WisdomTree International. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree MidCap and WisdomTree International.
Diversification Opportunities for WisdomTree MidCap and WisdomTree International
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 MidCap Earnings and WisdomTree International High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree International and WisdomTree MidCap 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 MidCap Earnings are associated (or correlated) with WisdomTree International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree International has no effect on the direction of WisdomTree MidCap i.e., WisdomTree MidCap and WisdomTree International go up and down completely randomly.
Pair Corralation between WisdomTree MidCap and WisdomTree International
Considering the 90-day investment horizon WisdomTree MidCap is expected to generate 1.38 times less return on investment than WisdomTree International. In addition to that, WisdomTree MidCap is 1.37 times more volatile than WisdomTree International High. It trades about 0.2 of its total potential returns per unit of risk. WisdomTree International High is currently generating about 0.38 per unit of volatility. If you would invest 4,875 in WisdomTree International High on November 21, 2025 and sell it today you would earn a total of 768.00 from holding WisdomTree International High or generate 15.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree MidCap Earnings vs. WisdomTree International High
Performance |
| Timeline |
| WisdomTree MidCap |
| WisdomTree International |
WisdomTree MidCap and WisdomTree International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree MidCap and WisdomTree International
The main advantage of trading using opposite WisdomTree MidCap and WisdomTree International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree MidCap position performs unexpectedly, WisdomTree International 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 International will offset losses from the drop in WisdomTree International's long position.The idea behind WisdomTree MidCap Earnings and WisdomTree International High pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |