Correlation Between WisdomTree India and SPDR SP

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

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

Diversification Opportunities for WisdomTree India and SPDR SP

-0.21

Correlation Coefficient

WisdomTree India  SPDR SP

Very good diversification

The 3 months correlation between WisdomTree and SPDR is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree India Earnings and SPDR SP Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SP Metals and WisdomTree India 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 India Earnings are associated (or correlated) with SPDR SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SP Metals has no effect on the direction of WisdomTree India i.e., WisdomTree India and SPDR SP go up and down completely randomly.

Pair Corralation between WisdomTree India and SPDR SP

Considering the 90-day investment horizon WisdomTree India Earnings is expected to under-perform the SPDR SP. But the etf apears to be less risky and, when comparing its historical volatility, WisdomTree India Earnings is 3.33 times less risky than SPDR SP. The etf trades about -0.01 of its potential returns per unit of risk. The SPDR SP Metals is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  8,899  in SPDR SP Metals on September 13, 2025 and sell it today you would earn a total of  1,315  from holding SPDR SP Metals or generate 14.78% return on investment over 90 days.

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

WisdomTree India Earnings  vs.  SPDR SP Metals

WisdomTree India Earnings

Risk-Adjusted Performance

Weak

Over the last 90 days WisdomTree India Earnings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, WisdomTree India is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

SPDR SP Metals

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR SP Metals are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, SPDR SP exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WisdomTree India and SPDR SP

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

The idea behind WisdomTree India Earnings and SPDR SP Metals 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.