Correlation Between PHT and WisdomTree Japan
Can any of the company-specific risk be diversified away by investing in both PHT 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 PHT and WisdomTree Japan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PHT and WisdomTree Japan Hedged, you can compare the effects of market volatilities on PHT 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 PHT with a short position of WisdomTree Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHT and WisdomTree Japan.
Diversification Opportunities for PHT and WisdomTree Japan
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PHT and WisdomTree is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding PHT and WisdomTree Japan Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Japan Hedged and PHT 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 PHT 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 Hedged has no effect on the direction of PHT i.e., PHT and WisdomTree Japan go up and down completely randomly.
Pair Corralation between PHT and WisdomTree Japan
If you would invest 14,000 in WisdomTree Japan Hedged on September 29, 2025 and sell it today you would earn a total of 363.00 from holding WisdomTree Japan Hedged or generate 2.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.76% |
| Values | Daily Returns |
PHT vs. WisdomTree Japan Hedged
Performance |
| Timeline |
| PHT |
Risk-Adjusted Performance
Weakest
Weak | Strong |
| WisdomTree Japan Hedged |
PHT and WisdomTree Japan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PHT and WisdomTree Japan
The main advantage of trading using opposite PHT and WisdomTree Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PHT 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.The idea behind PHT and WisdomTree Japan Hedged pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| WisdomTree Japan vs. Pacer Small Cap | WisdomTree Japan vs. WisdomTree MidCap Dividend | WisdomTree Japan vs. iShares Financials ETF | WisdomTree Japan vs. SPDR SP 600 |
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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