Correlation Between WisdomTree Trust and WisdomTree International

Can any of the company-specific risk be diversified away by investing in both WisdomTree Trust and WisdomTree International 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 Trust and WisdomTree International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between WisdomTree Trust and WisdomTree International Al, you can compare the effects of market volatilities on WisdomTree Trust and WisdomTree International 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 Trust with a short position of WisdomTree International. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Trust and WisdomTree International.

Diversification Opportunities for WisdomTree Trust and WisdomTree International

0.79

Correlation Coefficient

WisdomTree Trust  WisdomTree International

Poor diversification

The 3 months correlation between WisdomTree and WisdomTree is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Trust and WisdomTree International Al in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree International and WisdomTree Trust 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 Trust are associated (or correlated) with WisdomTree International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree International has no effect on the direction of WisdomTree Trust i.e., WisdomTree Trust and WisdomTree International go up and down completely randomly.

Pair Corralation between WisdomTree Trust and WisdomTree International

Given the investment horizon of 90 days WisdomTree Trust is expected to generate 3.44 times less return on investment than WisdomTree International. But when comparing it to its historical volatility, WisdomTree Trust is 1.18 times less risky than WisdomTree International. It trades about 0.07 of its potential returns per unit of risk. WisdomTree International Al is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  4,583  in WisdomTree International Al on May 15, 2025 and sell it today you would earn a total of  427.00  from holding WisdomTree International Al or generate 9.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

WisdomTree Trust   vs.  WisdomTree International Al

WisdomTree Trust

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, WisdomTree Trust is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

WisdomTree International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree International Al are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting basic indicators, WisdomTree International may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with WisdomTree Trust and WisdomTree International

The main advantage of trading using opposite WisdomTree Trust and WisdomTree International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Trust position performs unexpectedly, WisdomTree International 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 International will offset losses from the drop in WisdomTree International's long position.

The idea behind WisdomTree Trust and WisdomTree International Al 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.