Correlation Between WisdomTree Emerging and WisdomTree WTI
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Can any of the company-specific risk be diversified away by investing in both WisdomTree Emerging and WisdomTree WTI 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 Emerging and WisdomTree WTI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Emerging Markets and WisdomTree WTI Crude, you can compare the effects of market volatilities on WisdomTree Emerging and WisdomTree WTI 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 Emerging with a short position of WisdomTree WTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Emerging and WisdomTree WTI.
Diversification Opportunities for WisdomTree Emerging and WisdomTree WTI
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WisdomTree and WisdomTree is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Emerging Markets and WisdomTree WTI Crude in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree WTI Crude and WisdomTree Emerging 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 Emerging Markets are associated (or correlated) with WisdomTree WTI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree WTI Crude has no effect on the direction of WisdomTree Emerging i.e., WisdomTree Emerging and WisdomTree WTI go up and down completely randomly.
Pair Corralation between WisdomTree Emerging and WisdomTree WTI
Assuming the 90 days trading horizon WisdomTree Emerging Markets is expected to generate 0.45 times more return on investment than WisdomTree WTI. However, WisdomTree Emerging Markets is 2.24 times less risky than WisdomTree WTI. It trades about 0.16 of its potential returns per unit of risk. WisdomTree WTI Crude is currently generating about 0.05 per unit of risk. If you would invest 1,421 in WisdomTree Emerging Markets on November 20, 2025 and sell it today you would earn a total of 103.00 from holding WisdomTree Emerging Markets or generate 7.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Emerging Markets vs. WisdomTree WTI Crude
Performance |
| Timeline |
| WisdomTree Emerging |
| WisdomTree WTI Crude |
WisdomTree Emerging and WisdomTree WTI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Emerging and WisdomTree WTI
The main advantage of trading using opposite WisdomTree Emerging and WisdomTree WTI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Emerging position performs unexpectedly, WisdomTree WTI 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 WTI will offset losses from the drop in WisdomTree WTI's long position.| WisdomTree Emerging vs. WisdomTree WTI Crude | WisdomTree Emerging vs. WisdomTree Battery Metals | WisdomTree Emerging vs. WisdomTree STOXX Europe | WisdomTree Emerging vs. WisdomTree Physical Silver |
| WisdomTree WTI vs. AUREA SA INH | WisdomTree WTI vs. Superior Plus Corp | WisdomTree WTI vs. Franklin Global Quality | WisdomTree WTI vs. Intel |
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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