Correlation Between WisdomTree Japan and Dimensional International
Can any of the company-specific risk be diversified away by investing in both WisdomTree Japan and Dimensional 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 WisdomTree Japan and Dimensional International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Japan Hedged and Dimensional International High, you can compare the effects of market volatilities on WisdomTree Japan and Dimensional 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 WisdomTree Japan with a short position of Dimensional International. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Japan and Dimensional International.
Diversification Opportunities for WisdomTree Japan and Dimensional International
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WisdomTree and Dimensional is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Japan Hedged and Dimensional International High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dimensional International and WisdomTree Japan 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 Japan Hedged are associated (or correlated) with Dimensional International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dimensional International has no effect on the direction of WisdomTree Japan i.e., WisdomTree Japan and Dimensional International go up and down completely randomly.
Pair Corralation between WisdomTree Japan and Dimensional International
Considering the 90-day investment horizon WisdomTree Japan Hedged is expected to generate 1.88 times more return on investment than Dimensional International. However, WisdomTree Japan is 1.88 times more volatile than Dimensional International High. It trades about 0.33 of its potential returns per unit of risk. Dimensional International High is currently generating about 0.35 per unit of risk. If you would invest 14,437 in WisdomTree Japan Hedged on October 15, 2025 and sell it today you would earn a total of 906.00 from holding WisdomTree Japan Hedged or generate 6.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Japan Hedged vs. Dimensional International High
Performance |
| Timeline |
| WisdomTree Japan Hedged |
| Dimensional International |
WisdomTree Japan and Dimensional International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Japan and Dimensional International
The main advantage of trading using opposite WisdomTree Japan and Dimensional International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Japan position performs unexpectedly, Dimensional 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 Dimensional International will offset losses from the drop in Dimensional International's long position.| 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 CEOs Directory module to screen CEOs from public companies around the world.
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