Correlation Between Vulcan Value and WisdomTree International

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

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

Diversification Opportunities for Vulcan Value and WisdomTree International

0.75

Correlation Coefficient

Vulcan Value  WisdomTree International

Poor diversification

The 3 months correlation between Vulcan and WisdomTree is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Value Partners and WisdomTree International Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree International and Vulcan Value 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 Vulcan Value Partners 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 Vulcan Value i.e., Vulcan Value and WisdomTree International go up and down completely randomly.

Pair Corralation between Vulcan Value and WisdomTree International

Assuming the 90 days horizon Vulcan Value Partners is expected to generate 1.63 times more return on investment than WisdomTree International. However, Vulcan Value is 1.63 times more volatile than WisdomTree International LargeCap. It trades about 0.19 of its potential returns per unit of risk. WisdomTree International LargeCap is currently generating about 0.18 per unit of risk. If you would invest  1,107  in Vulcan Value Partners on April 29, 2025 and sell it today you would earn a total of  150.00  from holding Vulcan Value Partners or generate 13.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Vulcan Value Partners  vs.  WisdomTree International Large

Vulcan Value Partners

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vulcan Value Partners are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vulcan Value showed solid returns over the last few months and may actually be approaching a breakup point.

WisdomTree International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree International LargeCap are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, WisdomTree International may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Vulcan Value and WisdomTree International

The main advantage of trading using opposite Vulcan Value and WisdomTree International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Value 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 Vulcan Value Partners and WisdomTree International LargeCap 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.