Correlation Between WisdomTree Enhanced and WisdomTree EURO
Can any of the company-specific risk be diversified away by investing in both WisdomTree Enhanced and WisdomTree EURO 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 WisdomTree Enhanced and WisdomTree EURO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Enhanced Commodity and WisdomTree EURO STOXX, you can compare the effects of market volatilities on WisdomTree Enhanced and WisdomTree EURO 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 WisdomTree Enhanced with a short position of WisdomTree EURO. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Enhanced and WisdomTree EURO.
Diversification Opportunities for WisdomTree Enhanced and WisdomTree EURO
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between WisdomTree and WisdomTree is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Enhanced Commodity and WisdomTree EURO STOXX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree EURO STOXX and WisdomTree Enhanced 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 WisdomTree Enhanced Commodity are associated (or correlated) with WisdomTree EURO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree EURO STOXX has no effect on the direction of WisdomTree Enhanced i.e., WisdomTree Enhanced and WisdomTree EURO go up and down completely randomly.
Pair Corralation between WisdomTree Enhanced and WisdomTree EURO
Assuming the 90 days trading horizon WisdomTree Enhanced is expected to generate 11.37 times less return on investment than WisdomTree EURO. But when comparing it to its historical volatility, WisdomTree Enhanced Commodity is 4.22 times less risky than WisdomTree EURO. It trades about 0.14 of its potential returns per unit of risk. WisdomTree EURO STOXX is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 436,100 in WisdomTree EURO STOXX on September 27, 2025 and sell it today you would earn a total of 100,700 from holding WisdomTree EURO STOXX or generate 23.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Enhanced Commodity vs. WisdomTree EURO STOXX
Performance |
| Timeline |
| WisdomTree Enhanced |
| WisdomTree EURO STOXX |
WisdomTree Enhanced and WisdomTree EURO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Enhanced and WisdomTree EURO
The main advantage of trading using opposite WisdomTree Enhanced and WisdomTree EURO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Enhanced position performs unexpectedly, WisdomTree EURO 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 EURO will offset losses from the drop in WisdomTree EURO's long position.| WisdomTree Enhanced vs. Leverage Shares 3x | WisdomTree Enhanced vs. Leverage Shares 3x | WisdomTree Enhanced vs. Leverage Shares 3x | WisdomTree Enhanced vs. WisdomTree Silver 3x |
| WisdomTree EURO vs. WisdomTree Zinc | WisdomTree EURO vs. WisdomTree Brent Crude | WisdomTree EURO vs. WisdomTree Aluminium 2x | WisdomTree EURO vs. WisdomTree Enhanced Commodity |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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