Correlation Between IShares Trust and WisdomTree Asia

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

By analyzing existing cross correlation between iShares Trust and WisdomTree Asia Defense, you can compare the effects of market volatilities on IShares Trust and WisdomTree Asia 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 IShares Trust with a short position of WisdomTree Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Trust and WisdomTree Asia.

Diversification Opportunities for IShares Trust and WisdomTree Asia

0.0

Correlation Coefficient

IShares Trust  WisdomTree Asia

Pay attention - limited upside

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

Pair Corralation between IShares Trust and WisdomTree Asia

If you would invest  2,925  in iShares Trust on August 17, 2025 and sell it today you would earn a total of  118.00  from holding iShares Trust or generate 4.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

iShares Trust  vs.  WisdomTree Asia Defense

iShares Trust

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Trust are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, IShares Trust is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

WisdomTree Asia Defense

Risk-Adjusted Performance

Weakest

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

Pair Trading with IShares Trust and WisdomTree Asia

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

The idea behind iShares Trust and WisdomTree Asia Defense 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.

Check out your portfolio center.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.