Correlation Between Vanguard FTSE and WisdomTree Yield
Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE and WisdomTree Yield 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 Vanguard FTSE and WisdomTree Yield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard FTSE Developed and WisdomTree Yield Enhanced, you can compare the effects of market volatilities on Vanguard FTSE and WisdomTree Yield 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 Vanguard FTSE with a short position of WisdomTree Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and WisdomTree Yield.
Diversification Opportunities for Vanguard FTSE and WisdomTree Yield
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and WisdomTree is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Developed and WisdomTree Yield Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Yield Enhanced and Vanguard FTSE 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 Vanguard FTSE Developed are associated (or correlated) with WisdomTree Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Yield Enhanced has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and WisdomTree Yield go up and down completely randomly.
Pair Corralation between Vanguard FTSE and WisdomTree Yield
Considering the 90-day investment horizon Vanguard FTSE Developed is expected to generate 8.28 times more return on investment than WisdomTree Yield. However, Vanguard FTSE is 8.28 times more volatile than WisdomTree Yield Enhanced. It trades about 0.06 of its potential returns per unit of risk. WisdomTree Yield Enhanced is currently generating about 0.24 per unit of risk. If you would invest 5,849 in Vanguard FTSE Developed on August 27, 2025 and sell it today you would earn a total of 157.00 from holding Vanguard FTSE Developed or generate 2.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard FTSE Developed vs. WisdomTree Yield Enhanced
Performance |
| Timeline |
| Vanguard FTSE Developed |
| WisdomTree Yield Enhanced |
Vanguard FTSE and WisdomTree Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard FTSE and WisdomTree Yield
The main advantage of trading using opposite Vanguard FTSE and WisdomTree Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE position performs unexpectedly, WisdomTree Yield 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 Yield will offset losses from the drop in WisdomTree Yield's long position.| Vanguard FTSE vs. Strategy Shares | Vanguard FTSE vs. Freedom Day Dividend | Vanguard FTSE vs. Franklin Templeton ETF | Vanguard FTSE vs. iShares MSCI China |
| WisdomTree Yield vs. Valued Advisers Trust | WisdomTree Yield vs. Columbia Diversified Fixed | WisdomTree Yield vs. Principal Exchange Traded Funds | WisdomTree Yield vs. MFS Active Core |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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