Correlation Between Relative Sentiment and WisdomTree International
Can any of the company-specific risk be diversified away by investing in both Relative Sentiment and WisdomTree International 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 Relative Sentiment and WisdomTree International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Relative Sentiment Tactical and WisdomTree International Multifactor, you can compare the effects of market volatilities on Relative Sentiment and WisdomTree International 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 Relative Sentiment with a short position of WisdomTree International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Relative Sentiment and WisdomTree International.
Diversification Opportunities for Relative Sentiment and WisdomTree International
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Relative and WisdomTree is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Relative Sentiment Tactical and WisdomTree International Multi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree International and Relative Sentiment 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 Relative Sentiment Tactical are associated (or correlated) with WisdomTree International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree International has no effect on the direction of Relative Sentiment i.e., Relative Sentiment and WisdomTree International go up and down completely randomly.
Pair Corralation between Relative Sentiment and WisdomTree International
Given the investment horizon of 90 days Relative Sentiment Tactical is expected to generate 2.16 times more return on investment than WisdomTree International. However, Relative Sentiment is 2.16 times more volatile than WisdomTree International Multifactor. It trades about 0.12 of its potential returns per unit of risk. WisdomTree International Multifactor is currently generating about 0.17 per unit of risk. If you would invest 3,713 in Relative Sentiment Tactical on November 8, 2025 and sell it today you would earn a total of 345.00 from holding Relative Sentiment Tactical or generate 9.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Relative Sentiment Tactical vs. WisdomTree International Multi
Performance |
| Timeline |
| Relative Sentiment |
| WisdomTree International |
Relative Sentiment and WisdomTree International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Relative Sentiment and WisdomTree International
The main advantage of trading using opposite Relative Sentiment and WisdomTree International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Relative Sentiment position performs unexpectedly, WisdomTree International 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 International will offset losses from the drop in WisdomTree International's long position.| Relative Sentiment vs. John Hancock Exchange Traded | Relative Sentiment vs. Amplify Travel Tech | Relative Sentiment vs. Cohen Steers Natural | Relative Sentiment vs. Fundamental Income Net |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |