Correlation Between Knowledge Leaders and WisdomTree Japan
Can any of the company-specific risk be diversified away by investing in both Knowledge Leaders and WisdomTree Japan 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 Knowledge Leaders and WisdomTree Japan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knowledge Leaders Developed and WisdomTree Japan Hedged, you can compare the effects of market volatilities on Knowledge Leaders and WisdomTree Japan 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 Knowledge Leaders with a short position of WisdomTree Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knowledge Leaders and WisdomTree Japan.
Diversification Opportunities for Knowledge Leaders and WisdomTree Japan
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Knowledge and WisdomTree is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Knowledge Leaders Developed and WisdomTree Japan Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Japan Hedged and Knowledge Leaders 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 Knowledge Leaders Developed are associated (or correlated) with WisdomTree Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Japan Hedged has no effect on the direction of Knowledge Leaders i.e., Knowledge Leaders and WisdomTree Japan go up and down completely randomly.
Pair Corralation between Knowledge Leaders and WisdomTree Japan
If you would invest 5,106 in Knowledge Leaders Developed on October 4, 2025 and sell it today you would earn a total of 49.15 from holding Knowledge Leaders Developed or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Knowledge Leaders Developed vs. WisdomTree Japan Hedged
Performance |
| Timeline |
| Knowledge Leaders |
| WisdomTree Japan Hedged |
Risk-Adjusted Performance
Weakest
Weak | Strong |
Knowledge Leaders and WisdomTree Japan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knowledge Leaders and WisdomTree Japan
The main advantage of trading using opposite Knowledge Leaders and WisdomTree Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knowledge Leaders position performs unexpectedly, WisdomTree Japan 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 Japan will offset losses from the drop in WisdomTree Japan's long position.| Knowledge Leaders vs. iShares Trust | Knowledge Leaders vs. iShares MSCI USA | Knowledge Leaders vs. Invesco Raymond James | Knowledge Leaders vs. iShares MSCI Global |
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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |