Correlation Between WisdomTree International and SPDR STOXX
Can any of the company-specific risk be diversified away by investing in both WisdomTree International and SPDR STOXX 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 International and SPDR STOXX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree International SmallCap and SPDR STOXX Europe, you can compare the effects of market volatilities on WisdomTree International and SPDR STOXX 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 International with a short position of SPDR STOXX. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree International and SPDR STOXX.
Diversification Opportunities for WisdomTree International and SPDR STOXX
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WisdomTree and SPDR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree International Small and SPDR STOXX Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR STOXX Europe and WisdomTree International 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 International SmallCap are associated (or correlated) with SPDR STOXX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR STOXX Europe has no effect on the direction of WisdomTree International i.e., WisdomTree International and SPDR STOXX go up and down completely randomly.
Pair Corralation between WisdomTree International and SPDR STOXX
If you would invest 0.00 in SPDR STOXX Europe on July 25, 2025 and sell it today you would earn a total of 0.00 from holding SPDR STOXX Europe or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
WisdomTree International Small vs. SPDR STOXX Europe
Performance |
| Timeline |
| WisdomTree International |
Risk-Adjusted Performance
Mild
Weak | Strong |
| SPDR STOXX Europe |
WisdomTree International and SPDR STOXX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree International and SPDR STOXX
The main advantage of trading using opposite WisdomTree International and SPDR STOXX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree International position performs unexpectedly, SPDR STOXX 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 STOXX will offset losses from the drop in SPDR STOXX's long position.The idea behind WisdomTree International SmallCap and SPDR STOXX Europe 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.
| SPDR STOXX vs. SPDR SP 400 | SPDR STOXX vs. SPDR SP 400 | SPDR STOXX vs. SPDR SSGA My2027 | SPDR STOXX vs. SPDR SSGA My2028 |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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