Correlation Between Freedom 100 and WisdomTree High
Can any of the company-specific risk be diversified away by investing in both Freedom 100 and WisdomTree High 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 Freedom 100 and WisdomTree High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freedom 100 Emerging and WisdomTree High Dividend, you can compare the effects of market volatilities on Freedom 100 and WisdomTree High 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 Freedom 100 with a short position of WisdomTree High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freedom 100 and WisdomTree High.
Diversification Opportunities for Freedom 100 and WisdomTree High
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Freedom and WisdomTree is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Freedom 100 Emerging and WisdomTree High Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree High Dividend and Freedom 100 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 Freedom 100 Emerging are associated (or correlated) with WisdomTree High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree High Dividend has no effect on the direction of Freedom 100 i.e., Freedom 100 and WisdomTree High go up and down completely randomly.
Pair Corralation between Freedom 100 and WisdomTree High
Given the investment horizon of 90 days Freedom 100 Emerging is expected to generate 1.63 times more return on investment than WisdomTree High. However, Freedom 100 is 1.63 times more volatile than WisdomTree High Dividend. It trades about 0.27 of its potential returns per unit of risk. WisdomTree High Dividend is currently generating about 0.11 per unit of risk. If you would invest 4,017 in Freedom 100 Emerging on July 27, 2025 and sell it today you would earn a total of 699.00 from holding Freedom 100 Emerging or generate 17.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Freedom 100 Emerging vs. WisdomTree High Dividend
Performance |
| Timeline |
| Freedom 100 Emerging |
| WisdomTree High Dividend |
Freedom 100 and WisdomTree High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freedom 100 and WisdomTree High
The main advantage of trading using opposite Freedom 100 and WisdomTree High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freedom 100 position performs unexpectedly, WisdomTree High 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 High will offset losses from the drop in WisdomTree High's long position.| Freedom 100 vs. WisdomTree Emerging Markets | Freedom 100 vs. iShares MSCI Spain | Freedom 100 vs. WisdomTree Total Dividend | Freedom 100 vs. Pacer Developed Markets |
| WisdomTree High vs. WisdomTree Earnings 500 | WisdomTree High vs. Pacer Developed Markets | WisdomTree High vs. WisdomTree Emerging Markets | WisdomTree High vs. iShares Consumer Staples |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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