Correlation Between ProShares Trust and WisdomTree Emerging
Can any of the company-specific risk be diversified away by investing in both ProShares Trust 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 ProShares Trust and WisdomTree Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Trust ProShares and WisdomTree Emerging Markets, you can compare the effects of market volatilities on ProShares Trust 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 ProShares Trust with a short position of WisdomTree Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and WisdomTree Emerging.
Diversification Opportunities for ProShares Trust and WisdomTree Emerging
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ProShares and WisdomTree is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust ProShares and WisdomTree Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Emerging and ProShares Trust 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 ProShares Trust ProShares 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 ProShares Trust i.e., ProShares Trust and WisdomTree Emerging go up and down completely randomly.
Pair Corralation between ProShares Trust and WisdomTree Emerging
Allowing for the 90-day total investment horizon ProShares Trust ProShares is expected to generate 0.36 times more return on investment than WisdomTree Emerging. However, ProShares Trust ProShares is 2.75 times less risky than WisdomTree Emerging. It trades about 0.21 of its potential returns per unit of risk. WisdomTree Emerging Markets is currently generating about 0.07 per unit of risk. If you would invest 3,855 in ProShares Trust ProShares on October 21, 2025 and sell it today you would earn a total of 395.60 from holding ProShares Trust ProShares or generate 10.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 38.71% |
| Values | Daily Returns |
ProShares Trust ProShares vs. WisdomTree Emerging Markets
Performance |
| Timeline |
| ProShares Trust ProShares |
| WisdomTree Emerging |
ProShares Trust and WisdomTree Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and WisdomTree Emerging
The main advantage of trading using opposite ProShares Trust and WisdomTree Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust 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.| ProShares Trust vs. Invesco Exchange Traded | ProShares Trust vs. iShares Emerging Markets | ProShares Trust vs. Global X Funds | ProShares Trust vs. Invesco High Yield |
| WisdomTree Emerging vs. WisdomTree SmallCap Dividend | WisdomTree Emerging vs. Freedom 100 Emerging | WisdomTree Emerging vs. WisdomTree High Dividend | WisdomTree Emerging vs. Invesco FTSE RAFI |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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