Correlation Between SPDR MSCI and WisdomTree Europe
Can any of the company-specific risk be diversified away by investing in both SPDR MSCI and WisdomTree Europe 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 MSCI and WisdomTree Europe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR MSCI Europe and WisdomTree Europe SmallCap, you can compare the effects of market volatilities on SPDR MSCI and WisdomTree Europe 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 MSCI with a short position of WisdomTree Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR MSCI and WisdomTree Europe.
Diversification Opportunities for SPDR MSCI and WisdomTree Europe
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and WisdomTree is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding SPDR MSCI Europe and WisdomTree Europe SmallCap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Europe and SPDR MSCI 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 MSCI Europe are associated (or correlated) with WisdomTree Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Europe has no effect on the direction of SPDR MSCI i.e., SPDR MSCI and WisdomTree Europe go up and down completely randomly.
Pair Corralation between SPDR MSCI and WisdomTree Europe
Assuming the 90 days trading horizon SPDR MSCI is expected to generate 1.1 times less return on investment than WisdomTree Europe. In addition to that, SPDR MSCI is 2.15 times more volatile than WisdomTree Europe SmallCap. It trades about 0.18 of its total potential returns per unit of risk. WisdomTree Europe SmallCap is currently generating about 0.41 per unit of volatility. If you would invest 2,198 in WisdomTree Europe SmallCap on November 17, 2025 and sell it today you would earn a total of 208.00 from holding WisdomTree Europe SmallCap or generate 9.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.33% |
| Values | Daily Returns |
SPDR MSCI Europe vs. WisdomTree Europe SmallCap
Performance |
| Timeline |
| SPDR MSCI Europe |
| WisdomTree Europe |
SPDR MSCI and WisdomTree Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR MSCI and WisdomTree Europe
The main advantage of trading using opposite SPDR MSCI and WisdomTree Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR MSCI position performs unexpectedly, WisdomTree Europe 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 Europe will offset losses from the drop in WisdomTree Europe's long position.| SPDR MSCI vs. WisdomTree Europe SmallCap | SPDR MSCI vs. HSBC MSCI Emerging | SPDR MSCI vs. UBS ETF plc | SPDR MSCI vs. Amundi Index Solutions |
| WisdomTree Europe vs. HSBC MSCI Emerging | WisdomTree Europe vs. UBS ETF plc | WisdomTree Europe vs. Amundi Index Solutions | WisdomTree Europe vs. SPDR Bloomberg 1 3 |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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