Correlation Between Litman Gregory and WisdomTree Japan
Can any of the company-specific risk be diversified away by investing in both Litman Gregory 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 Litman Gregory and WisdomTree Japan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Litman Gregory Funds and WisdomTree Japan SmallCap, you can compare the effects of market volatilities on Litman Gregory 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 Litman Gregory with a short position of WisdomTree Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Litman Gregory and WisdomTree Japan.
Diversification Opportunities for Litman Gregory and WisdomTree Japan
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Litman and WisdomTree is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Litman Gregory Funds and WisdomTree Japan SmallCap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Japan SmallCap and Litman Gregory 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 Litman Gregory Funds 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 SmallCap has no effect on the direction of Litman Gregory i.e., Litman Gregory and WisdomTree Japan go up and down completely randomly.
Pair Corralation between Litman Gregory and WisdomTree Japan
Given the investment horizon of 90 days Litman Gregory is expected to generate 1.21 times less return on investment than WisdomTree Japan. In addition to that, Litman Gregory is 1.13 times more volatile than WisdomTree Japan SmallCap. It trades about 0.27 of its total potential returns per unit of risk. WisdomTree Japan SmallCap is currently generating about 0.37 per unit of volatility. If you would invest 9,016 in WisdomTree Japan SmallCap on November 18, 2025 and sell it today you would earn a total of 2,047 from holding WisdomTree Japan SmallCap or generate 22.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
Litman Gregory Funds vs. WisdomTree Japan SmallCap
Performance |
| Timeline |
| Litman Gregory Funds |
| WisdomTree Japan SmallCap |
Litman Gregory and WisdomTree Japan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Litman Gregory and WisdomTree Japan
The main advantage of trading using opposite Litman Gregory and WisdomTree Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Litman Gregory 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.| Litman Gregory vs. Pacer Funds Trust | Litman Gregory vs. Matthews China Discovery | Litman Gregory vs. AdvisorShares Hotel ETF | Litman Gregory vs. Spinnaker ETF Series |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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