Correlation Between WisdomTree International and ProShares MSCI
Can any of the company-specific risk be diversified away by investing in both WisdomTree International and ProShares MSCI 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 ProShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree International Multifactor and ProShares MSCI Transformational, you can compare the effects of market volatilities on WisdomTree International and ProShares MSCI 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 ProShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree International and ProShares MSCI.
Diversification Opportunities for WisdomTree International and ProShares MSCI
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WisdomTree and ProShares is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree International Multi and ProShares MSCI Transformationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares MSCI Trans 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 Multifactor are associated (or correlated) with ProShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares MSCI Trans has no effect on the direction of WisdomTree International i.e., WisdomTree International and ProShares MSCI go up and down completely randomly.
Pair Corralation between WisdomTree International and ProShares MSCI
Given the investment horizon of 90 days WisdomTree International Multifactor is expected to generate 0.69 times more return on investment than ProShares MSCI. However, WisdomTree International Multifactor is 1.46 times less risky than ProShares MSCI. It trades about 0.07 of its potential returns per unit of risk. ProShares MSCI Transformational is currently generating about -0.07 per unit of risk. If you would invest 3,177 in WisdomTree International Multifactor on October 4, 2025 and sell it today you would earn a total of 77.00 from holding WisdomTree International Multifactor or generate 2.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree International Multi vs. ProShares MSCI Transformationa
Performance |
| Timeline |
| WisdomTree International |
| ProShares MSCI Trans |
WisdomTree International and ProShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree International and ProShares MSCI
The main advantage of trading using opposite WisdomTree International and ProShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree International position performs unexpectedly, ProShares MSCI 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 ProShares MSCI will offset losses from the drop in ProShares MSCI's long position.The idea behind WisdomTree International Multifactor and ProShares MSCI Transformational 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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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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