Correlation Between WisdomTree International and WisdomTree SmallCap
Can any of the company-specific risk be diversified away by investing in both WisdomTree International and WisdomTree SmallCap 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 International and WisdomTree SmallCap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree International Hedged and WisdomTree SmallCap Dividend, you can compare the effects of market volatilities on WisdomTree International and WisdomTree SmallCap 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 International with a short position of WisdomTree SmallCap. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree International and WisdomTree SmallCap.
Diversification Opportunities for WisdomTree International and WisdomTree SmallCap
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WisdomTree and WisdomTree is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree International Hedge and WisdomTree SmallCap Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree SmallCap and WisdomTree International 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 International Hedged are associated (or correlated) with WisdomTree SmallCap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree SmallCap has no effect on the direction of WisdomTree International i.e., WisdomTree International and WisdomTree SmallCap go up and down completely randomly.
Pair Corralation between WisdomTree International and WisdomTree SmallCap
Given the investment horizon of 90 days WisdomTree International is expected to generate 1.44 times less return on investment than WisdomTree SmallCap. But when comparing it to its historical volatility, WisdomTree International Hedged is 1.39 times less risky than WisdomTree SmallCap. It trades about 0.15 of its potential returns per unit of risk. WisdomTree SmallCap Dividend is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,236 in WisdomTree SmallCap Dividend on October 30, 2025 and sell it today you would earn a total of 318.00 from holding WisdomTree SmallCap Dividend or generate 9.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree International Hedge vs. WisdomTree SmallCap Dividend
Performance |
| Timeline |
| WisdomTree International |
| WisdomTree SmallCap |
WisdomTree International and WisdomTree SmallCap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree International and WisdomTree SmallCap
The main advantage of trading using opposite WisdomTree International and WisdomTree SmallCap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree International position performs unexpectedly, WisdomTree SmallCap 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 SmallCap will offset losses from the drop in WisdomTree SmallCap's long position.| WisdomTree International vs. WisdomTree Emerging Markets | WisdomTree International vs. iShares MSCI USA | WisdomTree International vs. Amplify Junior Silver | WisdomTree International vs. SPDR SP 400 |
| WisdomTree SmallCap vs. WisdomTree Emerging Markets | WisdomTree SmallCap vs. WisdomTree Europe Hedged | WisdomTree SmallCap vs. iShares Global Energy | WisdomTree SmallCap vs. iShares Financial Services |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |