Correlation Between MicroSectors FANG and WisdomTree International
Can any of the company-specific risk be diversified away by investing in both MicroSectors FANG and WisdomTree 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 MicroSectors FANG and WisdomTree International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MicroSectors FANG Index and WisdomTree International Multifactor, you can compare the effects of market volatilities on MicroSectors FANG and WisdomTree 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 MicroSectors FANG with a short position of WisdomTree International. Check out your portfolio center. Please also check ongoing floating volatility patterns of MicroSectors FANG and WisdomTree International.
Diversification Opportunities for MicroSectors FANG and WisdomTree International
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MicroSectors and WisdomTree is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding MicroSectors FANG Index and WisdomTree International Multi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree International and MicroSectors FANG 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 MicroSectors FANG Index are associated (or correlated) with WisdomTree International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree International has no effect on the direction of MicroSectors FANG i.e., MicroSectors FANG and WisdomTree International go up and down completely randomly.
Pair Corralation between MicroSectors FANG and WisdomTree International
Given the investment horizon of 90 days MicroSectors FANG Index is expected to under-perform the WisdomTree International. In addition to that, MicroSectors FANG is 3.94 times more volatile than WisdomTree International Multifactor. It trades about -0.12 of its total potential returns per unit of risk. WisdomTree International Multifactor is currently generating about 0.15 per unit of volatility. If you would invest 3,171 in WisdomTree International Multifactor on October 31, 2025 and sell it today you would earn a total of 165.00 from holding WisdomTree International Multifactor or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MicroSectors FANG Index vs. WisdomTree International Multi
Performance |
| Timeline |
| MicroSectors FANG Index |
| WisdomTree International |
MicroSectors FANG and WisdomTree International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MicroSectors FANG and WisdomTree International
The main advantage of trading using opposite MicroSectors FANG and WisdomTree International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MicroSectors FANG position performs unexpectedly, WisdomTree 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 WisdomTree International will offset losses from the drop in WisdomTree International's long position.| MicroSectors FANG vs. MicroSectors FANG ETN | MicroSectors FANG vs. HCM Defender 100 | MicroSectors FANG vs. VictoryShares WestEnd Sector | MicroSectors FANG vs. MicroSectors Gold Miners |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |