Correlation Between Fundamental Income and WisdomTree Emerging
Can any of the company-specific risk be diversified away by investing in both Fundamental Income and WisdomTree Emerging 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 Emerging 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 Emerging Markets, you can compare the effects of market volatilities on Fundamental Income and WisdomTree Emerging 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 Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fundamental Income and WisdomTree Emerging.
Diversification Opportunities for Fundamental Income and WisdomTree Emerging
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fundamental and WisdomTree is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Fundamental Income Net and WisdomTree Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Emerging 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 Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Emerging has no effect on the direction of Fundamental Income i.e., Fundamental Income and WisdomTree Emerging go up and down completely randomly.
Pair Corralation between Fundamental Income and WisdomTree Emerging
Given the investment horizon of 90 days Fundamental Income is expected to generate 2.59 times less return on investment than WisdomTree Emerging. But when comparing it to its historical volatility, Fundamental Income Net is 1.09 times less risky than WisdomTree Emerging. It trades about 0.04 of its potential returns per unit of risk. WisdomTree Emerging Markets is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,797 in WisdomTree Emerging Markets on October 11, 2025 and sell it today you would earn a total of 1,126 from holding WisdomTree Emerging Markets or generate 40.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fundamental Income Net vs. WisdomTree Emerging Markets
Performance |
| Timeline |
| Fundamental Income Net |
| WisdomTree Emerging |
Fundamental Income and WisdomTree Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fundamental Income and WisdomTree Emerging
The main advantage of trading using opposite Fundamental Income and WisdomTree Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fundamental Income position performs unexpectedly, WisdomTree Emerging 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 Emerging will offset losses from the drop in WisdomTree Emerging'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 |
| WisdomTree Emerging vs. Sprott Copper Miners | WisdomTree Emerging vs. The Hoya Capital | WisdomTree Emerging vs. Invesco SP SmallCap | WisdomTree Emerging vs. KraneShares Emerging Markets |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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