Correlation Between SPDR MSCI and WisdomTree International

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Can any of the company-specific risk be diversified away by investing in both SPDR MSCI 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 SPDR MSCI and WisdomTree International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR MSCI Emerging and WisdomTree International Multifactor, you can compare the effects of market volatilities on SPDR MSCI 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 SPDR MSCI with a short position of WisdomTree International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR MSCI and WisdomTree International.

Diversification Opportunities for SPDR MSCI and WisdomTree International

0.38
  Correlation Coefficient

Weak diversification

The 3 months correlation between SPDR and WisdomTree is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding SPDR MSCI Emerging and WisdomTree International Multi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree International and SPDR 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 SPDR MSCI Emerging 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 SPDR MSCI i.e., SPDR MSCI and WisdomTree International go up and down completely randomly.

Pair Corralation between SPDR MSCI and WisdomTree International

Given the investment horizon of 90 days SPDR MSCI Emerging is expected to generate 1.54 times more return on investment than WisdomTree International. However, SPDR MSCI is 1.54 times more volatile than WisdomTree International Multifactor. It trades about 0.09 of its potential returns per unit of risk. WisdomTree International Multifactor is currently generating about 0.08 per unit of risk. If you would invest  3,260  in SPDR MSCI Emerging on July 23, 2025 and sell it today you would earn a total of  1,051  from holding SPDR MSCI Emerging or generate 32.24% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

SPDR MSCI Emerging  vs.  WisdomTree International Multi

 Performance 
       Timeline  
SPDR MSCI Emerging 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in SPDR MSCI Emerging are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating primary indicators, SPDR MSCI may actually be approaching a critical reversion point that can send shares even higher in November 2025.
WisdomTree International 

Risk-Adjusted Performance

Mild

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree International Multifactor are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, WisdomTree International is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

SPDR MSCI and WisdomTree International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SPDR MSCI and WisdomTree International

The main advantage of trading using opposite SPDR MSCI and WisdomTree International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR MSCI 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 SPDR MSCI Emerging and WisdomTree International Multifactor 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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