Correlation Between WisdomTree Japan and Great Elm
Can any of the company-specific risk be diversified away by investing in both WisdomTree Japan and Great Elm 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 Japan and Great Elm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Japan Opportunities and Great Elm Capital, you can compare the effects of market volatilities on WisdomTree Japan and Great Elm 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 Japan with a short position of Great Elm. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Japan and Great Elm.
Diversification Opportunities for WisdomTree Japan and Great Elm
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WisdomTree and Great is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Japan Opportunities and Great Elm Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Elm Capital and WisdomTree Japan 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 Japan Opportunities are associated (or correlated) with Great Elm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Elm Capital has no effect on the direction of WisdomTree Japan i.e., WisdomTree Japan and Great Elm go up and down completely randomly.
Pair Corralation between WisdomTree Japan and Great Elm
Given the investment horizon of 90 days WisdomTree Japan Opportunities is expected to generate 0.35 times more return on investment than Great Elm. However, WisdomTree Japan Opportunities is 2.87 times less risky than Great Elm. It trades about 0.19 of its potential returns per unit of risk. Great Elm Capital is currently generating about -0.17 per unit of risk. If you would invest 3,813 in WisdomTree Japan Opportunities on August 6, 2025 and sell it today you would earn a total of 477.00 from holding WisdomTree Japan Opportunities or generate 12.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Japan Opportunities vs. Great Elm Capital
Performance |
| Timeline |
| WisdomTree Japan Opp |
| Great Elm Capital |
WisdomTree Japan and Great Elm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Japan and Great Elm
The main advantage of trading using opposite WisdomTree Japan and Great Elm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Japan position performs unexpectedly, Great Elm 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 Great Elm will offset losses from the drop in Great Elm's long position.| WisdomTree Japan vs. Phenixfin | WisdomTree Japan vs. OFS Capital Corp | WisdomTree Japan vs. Great Elm Capital | WisdomTree Japan vs. Hennessy Ad |
| Great Elm vs. OFS Capital Corp | Great Elm vs. Phenixfin | Great Elm vs. WisdomTree Japan Opportunities | Great Elm vs. Bluemount Holdings Limited |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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