Correlation Between SPDR EURO and WisdomTree MidCap
Can any of the company-specific risk be diversified away by investing in both SPDR EURO and WisdomTree MidCap 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 SPDR EURO and WisdomTree MidCap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR EURO STOXX and WisdomTree MidCap Dividend, you can compare the effects of market volatilities on SPDR EURO and WisdomTree MidCap 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 SPDR EURO with a short position of WisdomTree MidCap. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR EURO and WisdomTree MidCap.
Diversification Opportunities for SPDR EURO and WisdomTree MidCap
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and WisdomTree is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding SPDR EURO STOXX and WisdomTree MidCap Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree MidCap and SPDR EURO 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 SPDR EURO STOXX are associated (or correlated) with WisdomTree MidCap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree MidCap has no effect on the direction of SPDR EURO i.e., SPDR EURO and WisdomTree MidCap go up and down completely randomly.
Pair Corralation between SPDR EURO and WisdomTree MidCap
Considering the 90-day investment horizon SPDR EURO STOXX is expected to generate 0.92 times more return on investment than WisdomTree MidCap. However, SPDR EURO STOXX is 1.09 times less risky than WisdomTree MidCap. It trades about 0.32 of its potential returns per unit of risk. WisdomTree MidCap Dividend is currently generating about 0.09 per unit of risk. If you would invest 6,248 in SPDR EURO STOXX on September 30, 2025 and sell it today you would earn a total of 224.00 from holding SPDR EURO STOXX or generate 3.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
SPDR EURO STOXX vs. WisdomTree MidCap Dividend
Performance |
| Timeline |
| SPDR EURO STOXX |
| WisdomTree MidCap |
SPDR EURO and WisdomTree MidCap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR EURO and WisdomTree MidCap
The main advantage of trading using opposite SPDR EURO and WisdomTree MidCap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR EURO position performs unexpectedly, WisdomTree MidCap 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 MidCap will offset losses from the drop in WisdomTree MidCap's long position.| SPDR EURO vs. WisdomTree MidCap Dividend | SPDR EURO vs. SPDR SP 600 | SPDR EURO vs. First Trust Dorsey | SPDR EURO vs. Vanguard Materials Index |
| WisdomTree MidCap vs. WisdomTree Emerging Markets | WisdomTree MidCap vs. WisdomTree Japan Hedged | WisdomTree MidCap vs. iShares Financials ETF | WisdomTree MidCap vs. iShares Exponential Technologies |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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