Correlation Between Vanguard Global and WisdomTree International
Can any of the company-specific risk be diversified away by investing in both Vanguard Global 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 Vanguard Global and WisdomTree International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Global Wellesley and WisdomTree International LargeCap, you can compare the effects of market volatilities on Vanguard Global 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 Vanguard Global with a short position of WisdomTree International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Global and WisdomTree International.
Diversification Opportunities for Vanguard Global and WisdomTree International
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and WisdomTree is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Global Wellesley and WisdomTree International Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree International and Vanguard Global 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 Vanguard Global Wellesley 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 Vanguard Global i.e., Vanguard Global and WisdomTree International go up and down completely randomly.
Pair Corralation between Vanguard Global and WisdomTree International
Assuming the 90 days horizon Vanguard Global is expected to generate 2.44 times less return on investment than WisdomTree International. But when comparing it to its historical volatility, Vanguard Global Wellesley is 2.61 times less risky than WisdomTree International. It trades about 0.21 of its potential returns per unit of risk. WisdomTree International LargeCap is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 6,322 in WisdomTree International LargeCap on October 25, 2025 and sell it today you would earn a total of 515.00 from holding WisdomTree International LargeCap or generate 8.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Global Wellesley vs. WisdomTree International Large
Performance |
| Timeline |
| Vanguard Global Wellesley |
| WisdomTree International |
Vanguard Global and WisdomTree International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Global and WisdomTree International
The main advantage of trading using opposite Vanguard Global and WisdomTree International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Global 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.| Vanguard Global vs. SHP ETF Trust | Vanguard Global vs. Opus Small Cap | Vanguard Global vs. John Hancock Multifactor | Vanguard Global vs. Amplify High Income |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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