Correlation Between WisdomTree International and WisdomTree
Can any of the company-specific risk be diversified away by investing in both WisdomTree International and WisdomTree 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 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 1 3 Year, you can compare the effects of market volatilities on WisdomTree International and WisdomTree 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree International and WisdomTree.
Diversification Opportunities for WisdomTree International and WisdomTree
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WisdomTree and WisdomTree is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree International Hedge and WisdomTree 1 3 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree 1 3 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. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree 1 3 has no effect on the direction of WisdomTree International i.e., WisdomTree International and WisdomTree go up and down completely randomly.
Pair Corralation between WisdomTree International and WisdomTree
Given the investment horizon of 90 days WisdomTree International Hedged is expected to generate 12.2 times more return on investment than WisdomTree. However, WisdomTree International is 12.2 times more volatile than WisdomTree 1 3 Year. It trades about 0.15 of its potential returns per unit of risk. WisdomTree 1 3 Year is currently generating about 0.16 per unit of risk. If you would invest 4,711 in WisdomTree International Hedged on October 30, 2025 and sell it today you would earn a total of 319.00 from holding WisdomTree International Hedged or generate 6.77% 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 1 3 Year
Performance |
| Timeline |
| WisdomTree International |
| WisdomTree 1 3 |
WisdomTree International and WisdomTree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree International and WisdomTree
The main advantage of trading using opposite WisdomTree International and WisdomTree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree International position performs unexpectedly, WisdomTree 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 will offset losses from the drop in WisdomTree'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 |
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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.
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