Correlation Between SPDR Series and WisdomTree Japan
Can any of the company-specific risk be diversified away by investing in both SPDR Series 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 Series 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 Series Trust and WisdomTree Japan Hedged, you can compare the effects of market volatilities on SPDR Series 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 Series with a short position of WisdomTree Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Series and WisdomTree Japan.
Diversification Opportunities for SPDR Series and WisdomTree Japan
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and WisdomTree is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Series Trust and WisdomTree Japan Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Japan Hedged and SPDR Series 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 Series Trust 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 Hedged has no effect on the direction of SPDR Series i.e., SPDR Series and WisdomTree Japan go up and down completely randomly.
Pair Corralation between SPDR Series and WisdomTree Japan
Given the investment horizon of 90 days SPDR Series is expected to generate 30.22 times less return on investment than WisdomTree Japan. But when comparing it to its historical volatility, SPDR Series Trust is 48.33 times less risky than WisdomTree Japan. It trades about 0.9 of its potential returns per unit of risk. WisdomTree Japan Hedged is currently generating about 0.57 of returns per unit of risk over similar time horizon. If you would invest 14,370 in WisdomTree Japan Hedged on October 21, 2025 and sell it today you would earn a total of 1,193 from holding WisdomTree Japan Hedged or generate 8.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
SPDR Series Trust vs. WisdomTree Japan Hedged
Performance |
| Timeline |
| SPDR Series Trust |
| WisdomTree Japan Hedged |
SPDR Series and WisdomTree Japan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Series and WisdomTree Japan
The main advantage of trading using opposite SPDR Series and WisdomTree Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Series 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.| SPDR Series vs. iShares Intermediate GovernmentCredit | SPDR Series vs. SPDR EURO STOXX | SPDR Series vs. Columbia ETF Trust | SPDR Series vs. WisdomTree MidCap Dividend |
| WisdomTree Japan vs. Pacer Small Cap | WisdomTree Japan vs. WisdomTree MidCap Dividend | WisdomTree Japan vs. iShares Financials ETF | WisdomTree Japan vs. SPDR SP 600 |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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