Correlation Between SPDR Russell and WisdomTree International
Can any of the company-specific risk be diversified away by investing in both SPDR Russell 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 SPDR Russell and WisdomTree International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Russell 1000 and WisdomTree International SmallCap, you can compare the effects of market volatilities on SPDR Russell 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 SPDR Russell with a short position of WisdomTree International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Russell and WisdomTree International.
Diversification Opportunities for SPDR Russell and WisdomTree International
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and WisdomTree is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Russell 1000 and WisdomTree International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree International and SPDR Russell 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 SPDR Russell 1000 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 SPDR Russell i.e., SPDR Russell and WisdomTree International go up and down completely randomly.
Pair Corralation between SPDR Russell and WisdomTree International
Given the investment horizon of 90 days SPDR Russell is expected to generate 1.63 times less return on investment than WisdomTree International. In addition to that, SPDR Russell is 1.05 times more volatile than WisdomTree International SmallCap. It trades about 0.05 of its total potential returns per unit of risk. WisdomTree International SmallCap is currently generating about 0.08 per unit of volatility. If you would invest 5,775 in WisdomTree International SmallCap on September 30, 2025 and sell it today you would earn a total of 2,310 from holding WisdomTree International SmallCap or generate 40.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
SPDR Russell 1000 vs. WisdomTree International Small
Performance |
| Timeline |
| SPDR Russell 1000 |
| WisdomTree International |
SPDR Russell and WisdomTree International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Russell and WisdomTree International
The main advantage of trading using opposite SPDR Russell and WisdomTree International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Russell 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.| SPDR Russell vs. SPDR Russell 1000 | SPDR Russell vs. SPDR SP Emerging | SPDR Russell vs. SPDR MSCI EAFE | SPDR Russell vs. WisdomTree MidCap Earnings |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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