Correlation Between IShares ESG and WisdomTree China
Can any of the company-specific risk be diversified away by investing in both IShares ESG and WisdomTree China 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 IShares ESG and WisdomTree China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares ESG Advanced and WisdomTree China ex State Owned, you can compare the effects of market volatilities on IShares ESG and WisdomTree China 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 IShares ESG with a short position of WisdomTree China. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares ESG and WisdomTree China.
Diversification Opportunities for IShares ESG and WisdomTree China
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and WisdomTree is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding iShares ESG Advanced and WisdomTree China ex State Owne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree China and IShares ESG 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 iShares ESG Advanced are associated (or correlated) with WisdomTree China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree China has no effect on the direction of IShares ESG i.e., IShares ESG and WisdomTree China go up and down completely randomly.
Pair Corralation between IShares ESG and WisdomTree China
Given the investment horizon of 90 days IShares ESG is expected to generate 2.45 times less return on investment than WisdomTree China. But when comparing it to its historical volatility, iShares ESG Advanced is 1.71 times less risky than WisdomTree China. It trades about 0.17 of its potential returns per unit of risk. WisdomTree China ex State Owned is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 3,424 in WisdomTree China ex State Owned on June 9, 2025 and sell it today you would earn a total of 698.00 from holding WisdomTree China ex State Owned or generate 20.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares ESG Advanced vs. WisdomTree China ex State Owne
Performance |
| Timeline |
| iShares ESG Advanced |
| WisdomTree China |
IShares ESG and WisdomTree China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares ESG and WisdomTree China
The main advantage of trading using opposite IShares ESG and WisdomTree China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares ESG position performs unexpectedly, WisdomTree China 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 China will offset losses from the drop in WisdomTree China's long position.| IShares ESG vs. iShares ESG Advanced | IShares ESG vs. iShares ESG MSCI | IShares ESG vs. iShares ESG Aware | IShares ESG vs. iShares ESG USD |
| WisdomTree China vs. Global X MSCI | WisdomTree China vs. WisdomTree Emerging Markets | WisdomTree China vs. Invesco China Technology | WisdomTree China vs. iShares MSCI China |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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