Correlation Between IMGP DBi and WisdomTree International

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

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

Diversification Opportunities for IMGP DBi and WisdomTree International

0.44

Correlation Coefficient

IMGP DBi  WisdomTree International

Very weak diversification

The 3 months correlation between IMGP and WisdomTree is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding iMGP DBi Managed and WisdomTree International Effic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree International and IMGP DBi 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 iMGP DBi Managed 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 IMGP DBi i.e., IMGP DBi and WisdomTree International go up and down completely randomly.

Pair Corralation between IMGP DBi and WisdomTree International

Given the investment horizon of 90 days IMGP DBi is expected to generate 1.54 times less return on investment than WisdomTree International. But when comparing it to its historical volatility, iMGP DBi Managed is 2.4 times less risky than WisdomTree International. It trades about 0.21 of its potential returns per unit of risk. WisdomTree International Efficient is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  3,935  in WisdomTree International Efficient on May 16, 2025 and sell it today you would earn a total of  249.00  from holding WisdomTree International Efficient or generate 6.33% return on investment over 90 days.

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

iMGP DBi Managed  vs.  WisdomTree International Effic

iMGP DBi Managed

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iMGP DBi Managed are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, IMGP DBi is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

WisdomTree International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree International Efficient are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, WisdomTree International may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with IMGP DBi and WisdomTree International

The main advantage of trading using opposite IMGP DBi and WisdomTree International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IMGP DBi 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 iMGP DBi Managed and WisdomTree International Efficient 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.