Correlation Between Telecommunications and WisdomTree Asia
Can any of the company-specific risk be diversified away by investing in both Telecommunications and WisdomTree Asia 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 Telecommunications and WisdomTree Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telecommunications Fund Investor and WisdomTree Asia Defense, you can compare the effects of market volatilities on Telecommunications and WisdomTree Asia 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 Telecommunications with a short position of WisdomTree Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecommunications and WisdomTree Asia.
Diversification Opportunities for Telecommunications and WisdomTree Asia
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Telecommunications and WisdomTree is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Telecommunications Fund Invest and WisdomTree Asia Defense in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Asia Defense and Telecommunications 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 Telecommunications Fund Investor are associated (or correlated) with WisdomTree Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Asia Defense has no effect on the direction of Telecommunications i.e., Telecommunications and WisdomTree Asia go up and down completely randomly.
Pair Corralation between Telecommunications and WisdomTree Asia
Assuming the 90 days horizon Telecommunications Fund Investor is expected to generate 0.72 times more return on investment than WisdomTree Asia. However, Telecommunications Fund Investor is 1.4 times less risky than WisdomTree Asia. It trades about 0.07 of its potential returns per unit of risk. WisdomTree Asia Defense is currently generating about 0.01 per unit of risk. If you would invest 6,482 in Telecommunications Fund Investor on October 11, 2025 and sell it today you would earn a total of 286.00 from holding Telecommunications Fund Investor or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telecommunications Fund Invest vs. WisdomTree Asia Defense
Performance |
| Timeline |
| Telecommunications |
| WisdomTree Asia Defense |
Telecommunications and WisdomTree Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecommunications and WisdomTree Asia
The main advantage of trading using opposite Telecommunications and WisdomTree Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecommunications position performs unexpectedly, WisdomTree Asia 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 Asia will offset losses from the drop in WisdomTree Asia's long position.| Telecommunications vs. Banking Fund Investor | Telecommunications vs. iShares Trust | Telecommunications vs. Cullen Small Cap | Telecommunications vs. WisdomTree Asia Defense |
| WisdomTree Asia vs. iShares Regional Banks | WisdomTree Asia vs. iShares MSCI Singapore | WisdomTree Asia vs. iShares Currency Hedged | WisdomTree Asia vs. iShares Insurance ETF |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |