Correlation Between WisdomTree Europe and Invesco Next
Can any of the company-specific risk be diversified away by investing in both WisdomTree Europe and Invesco Next 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 Europe and Invesco Next into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Europe Hedged and Invesco Next Gen, you can compare the effects of market volatilities on WisdomTree Europe and Invesco Next 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 Europe with a short position of Invesco Next. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Europe and Invesco Next.
Diversification Opportunities for WisdomTree Europe and Invesco Next
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WisdomTree and Invesco is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Europe Hedged and Invesco Next Gen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Next Gen and WisdomTree Europe 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 Europe Hedged are associated (or correlated) with Invesco Next. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Next Gen has no effect on the direction of WisdomTree Europe i.e., WisdomTree Europe and Invesco Next go up and down completely randomly.
Pair Corralation between WisdomTree Europe and Invesco Next
Given the investment horizon of 90 days WisdomTree Europe Hedged is expected to generate 0.54 times more return on investment than Invesco Next. However, WisdomTree Europe Hedged is 1.85 times less risky than Invesco Next. It trades about 0.32 of its potential returns per unit of risk. Invesco Next Gen is currently generating about 0.15 per unit of risk. If you would invest 5,017 in WisdomTree Europe Hedged on December 4, 2025 and sell it today you would earn a total of 391.00 from holding WisdomTree Europe Hedged or generate 7.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 63.33% |
| Values | Daily Returns |
WisdomTree Europe Hedged vs. Invesco Next Gen
Performance |
| Timeline |
| WisdomTree Europe Hedged |
Risk-Adjusted Performance
Solid
Weak | Strong |
| Invesco Next Gen |
WisdomTree Europe and Invesco Next Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Europe and Invesco Next
The main advantage of trading using opposite WisdomTree Europe and Invesco Next positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Europe position performs unexpectedly, Invesco Next 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 Invesco Next will offset losses from the drop in Invesco Next's long position.| WisdomTree Europe vs. iShares MSCI Global | WisdomTree Europe vs. iShares Digital Infrastructure | WisdomTree Europe vs. Knowledge Leaders Developed | WisdomTree Europe vs. Invesco Raymond James |
| Invesco Next vs. Invesco Nasdaq Biotechnology | Invesco Next vs. Direxion Daily Industrials | Invesco Next vs. Pacer Export Leaders | Invesco Next vs. Trueshares Structured Outcome |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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