Correlation Between WisdomTree Asia and WisdomTree Emerging
Can any of the company-specific risk be diversified away by investing in both WisdomTree Asia and WisdomTree Emerging 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 Asia and WisdomTree Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Asia Defense and WisdomTree Emerging Currency, you can compare the effects of market volatilities on WisdomTree Asia and WisdomTree Emerging 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 Asia with a short position of WisdomTree Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Asia and WisdomTree Emerging.
Diversification Opportunities for WisdomTree Asia and WisdomTree Emerging
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WisdomTree and WisdomTree is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Asia Defense and WisdomTree Emerging Currency in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Emerging and WisdomTree Asia 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 Asia Defense are associated (or correlated) with WisdomTree Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Emerging has no effect on the direction of WisdomTree Asia i.e., WisdomTree Asia and WisdomTree Emerging go up and down completely randomly.
Pair Corralation between WisdomTree Asia and WisdomTree Emerging
Given the investment horizon of 90 days WisdomTree Asia Defense is expected to generate 5.08 times more return on investment than WisdomTree Emerging. However, WisdomTree Asia is 5.08 times more volatile than WisdomTree Emerging Currency. It trades about 0.14 of its potential returns per unit of risk. WisdomTree Emerging Currency is currently generating about 0.16 per unit of risk. If you would invest 2,979 in WisdomTree Asia Defense on November 8, 2025 and sell it today you would earn a total of 374.00 from holding WisdomTree Asia Defense or generate 12.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Asia Defense vs. WisdomTree Emerging Currency
Performance |
| Timeline |
| WisdomTree Asia Defense |
| WisdomTree Emerging |
WisdomTree Asia and WisdomTree Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Asia and WisdomTree Emerging
The main advantage of trading using opposite WisdomTree Asia and WisdomTree Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Asia position performs unexpectedly, WisdomTree Emerging 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 Emerging will offset losses from the drop in WisdomTree Emerging's long position.| WisdomTree Asia vs. Telecommunications Fund Investor | WisdomTree Asia vs. iShares Trust | WisdomTree Asia vs. Jacob Small Cap | WisdomTree Asia vs. Cullen Small Cap |
| WisdomTree Emerging vs. US Global Sea | WisdomTree Emerging vs. ProShares Equities for | WisdomTree Emerging vs. Tidal ETF Trust | WisdomTree Emerging vs. Spinnaker ETF Series |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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