Correlation Between WisdomTree BioRevolution and Fidelity Emerging

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Can any of the company-specific risk be diversified away by investing in both WisdomTree BioRevolution and Fidelity 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 BioRevolution and Fidelity Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree BioRevolution and Fidelity Emerging Markets, you can compare the effects of market volatilities on WisdomTree BioRevolution and Fidelity 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 BioRevolution with a short position of Fidelity Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree BioRevolution and Fidelity Emerging.

Diversification Opportunities for WisdomTree BioRevolution and Fidelity Emerging

0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between WisdomTree and Fidelity is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree BioRevolution and Fidelity Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Emerging Markets and WisdomTree BioRevolution 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 BioRevolution are associated (or correlated) with Fidelity Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Emerging Markets has no effect on the direction of WisdomTree BioRevolution i.e., WisdomTree BioRevolution and Fidelity Emerging go up and down completely randomly.

Pair Corralation between WisdomTree BioRevolution and Fidelity Emerging

Given the investment horizon of 90 days WisdomTree BioRevolution is expected to generate 1.03 times less return on investment than Fidelity Emerging. In addition to that, WisdomTree BioRevolution is 1.85 times more volatile than Fidelity Emerging Markets. It trades about 0.16 of its total potential returns per unit of risk. Fidelity Emerging Markets is currently generating about 0.3 per unit of volatility. If you would invest  2,996  in Fidelity Emerging Markets on November 19, 2025 and sell it today you would earn a total of  447.00  from holding Fidelity Emerging Markets or generate 14.92% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

WisdomTree BioRevolution  vs.  Fidelity Emerging Markets

 Performance 
       Timeline  
WisdomTree BioRevolution 

Risk-Adjusted Performance

Fair

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree BioRevolution are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, WisdomTree BioRevolution sustained solid returns over the last few months and may actually be approaching a breakup point.
Fidelity Emerging Markets 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Emerging Markets are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Fidelity Emerging displayed solid returns over the last few months and may actually be approaching a breakup point.

WisdomTree BioRevolution and Fidelity Emerging Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with WisdomTree BioRevolution and Fidelity Emerging

The main advantage of trading using opposite WisdomTree BioRevolution and Fidelity Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree BioRevolution position performs unexpectedly, Fidelity 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 Fidelity Emerging will offset losses from the drop in Fidelity Emerging's long position.
The idea behind WisdomTree BioRevolution and Fidelity Emerging Markets 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.
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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