Correlation Between SPDR SSGA and WisdomTree Japan

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

By analyzing existing cross correlation between SPDR SSGA My2026 and WisdomTree Japan SmallCap, you can compare the effects of market volatilities on SPDR SSGA and WisdomTree Japan 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 SSGA with a short position of WisdomTree Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SSGA and WisdomTree Japan.

Diversification Opportunities for SPDR SSGA and WisdomTree Japan

0.0

Correlation Coefficient

SPDR SSGA  WisdomTree Japan

Pay attention - limited upside

The 3 months correlation between SPDR and WisdomTree is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SSGA My2026 and WisdomTree Japan SmallCap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Japan SmallCap and SPDR SSGA 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 SSGA My2026 are associated (or correlated) with WisdomTree Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Japan SmallCap has no effect on the direction of SPDR SSGA i.e., SPDR SSGA and WisdomTree Japan go up and down completely randomly.

Pair Corralation between SPDR SSGA and WisdomTree Japan

If you would invest  8,285  in WisdomTree Japan SmallCap on May 28, 2025 and sell it today you would earn a total of  1,113  from holding WisdomTree Japan SmallCap or generate 13.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

SPDR SSGA My2026  vs.  WisdomTree Japan SmallCap

SPDR SSGA My2026

Risk-Adjusted Performance

Solid

Over the last 90 days SPDR SSGA My2026 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, SPDR SSGA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

WisdomTree Japan SmallCap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Japan SmallCap are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting technical and fundamental indicators, WisdomTree Japan revealed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SPDR SSGA and WisdomTree Japan

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

The idea behind SPDR SSGA My2026 and WisdomTree Japan SmallCap 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.