Correlation Between Xtrackers MSCI and WisdomTree Dynamic

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

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

Diversification Opportunities for Xtrackers MSCI and WisdomTree Dynamic

0.84

Correlation Coefficient

Xtrackers MSCI  WisdomTree Dynamic

Very poor diversification

The 3 months correlation between Xtrackers and WisdomTree is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers MSCI All and WisdomTree Dynamic Currency in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Dynamic and Xtrackers MSCI 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 Xtrackers MSCI All are associated (or correlated) with WisdomTree Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Dynamic has no effect on the direction of Xtrackers MSCI i.e., Xtrackers MSCI and WisdomTree Dynamic go up and down completely randomly.

Pair Corralation between Xtrackers MSCI and WisdomTree Dynamic

Given the investment horizon of 90 days Xtrackers MSCI All is expected to generate 0.9 times more return on investment than WisdomTree Dynamic. However, Xtrackers MSCI All is 1.11 times less risky than WisdomTree Dynamic. It trades about 0.21 of its potential returns per unit of risk. WisdomTree Dynamic Currency is currently generating about 0.1 per unit of risk. If you would invest  3,710  in Xtrackers MSCI All on July 20, 2025 and sell it today you would earn a total of  303.00  from holding Xtrackers MSCI All or generate 8.17% return on investment over 90 days.

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

Xtrackers MSCI All  vs.  WisdomTree Dynamic Currency

Xtrackers MSCI All

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Xtrackers MSCI All are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Xtrackers MSCI may actually be approaching a critical reversion point that can send shares even higher in November 2025.

WisdomTree Dynamic

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Dynamic Currency are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, WisdomTree Dynamic is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Xtrackers MSCI and WisdomTree Dynamic

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

The idea behind Xtrackers MSCI All and WisdomTree Dynamic Currency 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..