Correlation Between IShares MSCI and WisdomTree Global
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and WisdomTree Global 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 Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI EAFE and WisdomTree Global ex US, you can compare the effects of market volatilities on IShares MSCI and WisdomTree Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and WisdomTree Global.
Diversification Opportunities for IShares MSCI and WisdomTree Global
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and WisdomTree is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI EAFE and WisdomTree Global ex US in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Global 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 EAFE are associated (or correlated) with WisdomTree Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Global has no effect on the direction of IShares MSCI i.e., IShares MSCI and WisdomTree Global go up and down completely randomly.
Pair Corralation between IShares MSCI and WisdomTree Global
Considering the 90-day investment horizon IShares MSCI is expected to generate 1.11 times less return on investment than WisdomTree Global. In addition to that, IShares MSCI is 1.02 times more volatile than WisdomTree Global ex US. It trades about 0.06 of its total potential returns per unit of risk. WisdomTree Global ex US is currently generating about 0.07 per unit of volatility. If you would invest 3,727 in WisdomTree Global ex US on March 15, 2025 and sell it today you would earn a total of 223.00 from holding WisdomTree Global ex US or generate 5.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI EAFE vs. WisdomTree Global ex US
Performance |
| Timeline |
| iShares MSCI EAFE |
| WisdomTree Global |
IShares MSCI and WisdomTree Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and WisdomTree Global
The main advantage of trading using opposite IShares MSCI and WisdomTree Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, WisdomTree Global 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 Global will offset losses from the drop in WisdomTree Global's long position.| IShares MSCI vs. iShares MSCI EAFE | IShares MSCI vs. iShares MSCI EAFE | IShares MSCI vs. iShares Russell Mid Cap | IShares MSCI vs. iShares MSCI Netherlands |
| WisdomTree Global vs. WisdomTree Global High | WisdomTree Global vs. WisdomTree International MidCap | WisdomTree Global vs. WisdomTree Japan SmallCap | WisdomTree Global vs. WisdomTree International High |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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