Correlation Between ProShares MSCI and WisdomTree India

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Can any of the company-specific risk be diversified away by investing in both ProShares MSCI and WisdomTree India 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 ProShares MSCI and WisdomTree India into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares MSCI Emerging and WisdomTree India Hedged, you can compare the effects of market volatilities on ProShares MSCI and WisdomTree India 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 ProShares MSCI with a short position of WisdomTree India. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares MSCI and WisdomTree India.

Diversification Opportunities for ProShares MSCI and WisdomTree India

-0.15
  Correlation Coefficient

Good diversification

The 3 months correlation between ProShares and WisdomTree is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding ProShares MSCI Emerging and WisdomTree India Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree India Hedged and ProShares 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 ProShares MSCI Emerging are associated (or correlated) with WisdomTree India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree India Hedged has no effect on the direction of ProShares MSCI i.e., ProShares MSCI and WisdomTree India go up and down completely randomly.

Pair Corralation between ProShares MSCI and WisdomTree India

Given the investment horizon of 90 days ProShares MSCI Emerging is expected to generate 0.79 times more return on investment than WisdomTree India. However, ProShares MSCI Emerging is 1.26 times less risky than WisdomTree India. It trades about 0.17 of its potential returns per unit of risk. WisdomTree India Hedged is currently generating about -0.01 per unit of risk. If you would invest  4,599  in ProShares MSCI Emerging on November 21, 2025 and sell it today you would earn a total of  235.00  from holding ProShares MSCI Emerging or generate 5.11% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

ProShares MSCI Emerging  vs.  WisdomTree India Hedged

 Performance 
       Timeline  
ProShares MSCI Emerging 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in ProShares MSCI Emerging are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable fundamental indicators, ProShares MSCI is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
WisdomTree India Hedged 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days WisdomTree India Hedged has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, WisdomTree India is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

ProShares MSCI and WisdomTree India Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ProShares MSCI and WisdomTree India

The main advantage of trading using opposite ProShares MSCI and WisdomTree India positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares MSCI position performs unexpectedly, WisdomTree India 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 India will offset losses from the drop in WisdomTree India's long position.
The idea behind ProShares MSCI Emerging and WisdomTree India Hedged 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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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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