Correlation Between IShares MSCI and WisdomTree SmallCap
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and WisdomTree SmallCap 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 IShares MSCI and WisdomTree SmallCap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI Emerging and WisdomTree SmallCap Dividend, you can compare the effects of market volatilities on IShares MSCI and WisdomTree SmallCap 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 IShares MSCI with a short position of WisdomTree SmallCap. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and WisdomTree SmallCap.
Diversification Opportunities for IShares MSCI and WisdomTree SmallCap
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and WisdomTree is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Emerging and WisdomTree SmallCap Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree SmallCap and IShares MSCI 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 iShares MSCI Emerging are associated (or correlated) with WisdomTree SmallCap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree SmallCap has no effect on the direction of IShares MSCI i.e., IShares MSCI and WisdomTree SmallCap go up and down completely randomly.
Pair Corralation between IShares MSCI and WisdomTree SmallCap
Given the investment horizon of 90 days iShares MSCI Emerging is expected to generate 0.91 times more return on investment than WisdomTree SmallCap. However, iShares MSCI Emerging is 1.1 times less risky than WisdomTree SmallCap. It trades about 0.15 of its potential returns per unit of risk. WisdomTree SmallCap Dividend is currently generating about 0.04 per unit of risk. If you would invest 8,521 in iShares MSCI Emerging on July 21, 2025 and sell it today you would earn a total of 852.00 from holding iShares MSCI Emerging or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI Emerging vs. WisdomTree SmallCap Dividend
Performance |
| Timeline |
| iShares MSCI Emerging |
| WisdomTree SmallCap |
IShares MSCI and WisdomTree SmallCap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and WisdomTree SmallCap
The main advantage of trading using opposite IShares MSCI and WisdomTree SmallCap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, WisdomTree SmallCap 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 SmallCap will offset losses from the drop in WisdomTree SmallCap's long position.| IShares MSCI vs. iShares MSCI Spain | IShares MSCI vs. iShares MSCI USA | IShares MSCI vs. WisdomTree Total Dividend | IShares MSCI vs. iShares MSCI Australia |
| WisdomTree SmallCap vs. iShares Financial Services | WisdomTree SmallCap vs. WisdomTree Emerging Markets | WisdomTree SmallCap vs. WisdomTree Europe Hedged | WisdomTree SmallCap vs. iShares Core MSCI |
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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