Correlation Between WisdomTree Managed and Dimensional Targeted
Can any of the company-specific risk be diversified away by investing in both WisdomTree Managed and Dimensional Targeted 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 Managed and Dimensional Targeted into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Managed Futures and Dimensional Targeted Value, you can compare the effects of market volatilities on WisdomTree Managed and Dimensional Targeted 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 Managed with a short position of Dimensional Targeted. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Managed and Dimensional Targeted.
Diversification Opportunities for WisdomTree Managed and Dimensional Targeted
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WisdomTree and Dimensional is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Managed Futures and Dimensional Targeted Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional Targeted and WisdomTree Managed 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 Managed Futures are associated (or correlated) with Dimensional Targeted. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional Targeted has no effect on the direction of WisdomTree Managed i.e., WisdomTree Managed and Dimensional Targeted go up and down completely randomly.
Pair Corralation between WisdomTree Managed and Dimensional Targeted
Given the investment horizon of 90 days WisdomTree Managed is expected to generate 5.23 times less return on investment than Dimensional Targeted. But when comparing it to its historical volatility, WisdomTree Managed Futures is 1.51 times less risky than Dimensional Targeted. It trades about 0.06 of its potential returns per unit of risk. Dimensional Targeted Value is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 5,679 in Dimensional Targeted Value on November 7, 2025 and sell it today you would earn a total of 834.00 from holding Dimensional Targeted Value or generate 14.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Managed Futures vs. Dimensional Targeted Value
Performance |
| Timeline |
| WisdomTree Managed |
| Dimensional Targeted |
WisdomTree Managed and Dimensional Targeted Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Managed and Dimensional Targeted
The main advantage of trading using opposite WisdomTree Managed and Dimensional Targeted positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Managed position performs unexpectedly, Dimensional Targeted 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 Dimensional Targeted will offset losses from the drop in Dimensional Targeted's long position.| WisdomTree Managed vs. Elevation Series Trust | WisdomTree Managed vs. Exchange Traded Concepts | WisdomTree Managed vs. Innovator MSCI EAFE | WisdomTree Managed vs. VanEck Inflation Allocation |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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