Correlation Between Fundamental Income and WisdomTree International
Can any of the company-specific risk be diversified away by investing in both Fundamental Income 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 Fundamental Income and WisdomTree International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fundamental Income Net and WisdomTree International Multifactor, you can compare the effects of market volatilities on Fundamental Income 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 Fundamental Income with a short position of WisdomTree International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fundamental Income and WisdomTree International.
Diversification Opportunities for Fundamental Income and WisdomTree International
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Fundamental and WisdomTree is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Fundamental Income Net and WisdomTree International Multi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree International and Fundamental Income 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 Fundamental Income Net 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 Fundamental Income i.e., Fundamental Income and WisdomTree International go up and down completely randomly.
Pair Corralation between Fundamental Income and WisdomTree International
Given the investment horizon of 90 days Fundamental Income Net is expected to generate 1.24 times more return on investment than WisdomTree International. However, Fundamental Income is 1.24 times more volatile than WisdomTree International Multifactor. It trades about 0.29 of its potential returns per unit of risk. WisdomTree International Multifactor is currently generating about 0.21 per unit of risk. If you would invest 2,353 in Fundamental Income Net on December 5, 2025 and sell it today you would earn a total of 332.00 from holding Fundamental Income Net or generate 14.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fundamental Income Net vs. WisdomTree International Multi
Performance |
| Timeline |
| Fundamental Income Net |
| WisdomTree International |
Fundamental Income and WisdomTree International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fundamental Income and WisdomTree International
The main advantage of trading using opposite Fundamental Income and WisdomTree International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fundamental Income 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.| Fundamental Income vs. Investment Managers Series | Fundamental Income vs. Amplify Travel Tech | Fundamental Income vs. Cohen Steers Natural | Fundamental Income vs. Strategy Shares |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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