Correlation Between WisdomTree Trust and DBX ETF
Can any of the company-specific risk be diversified away by investing in both WisdomTree Trust and DBX ETF 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 Trust and DBX ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Trust and DBX ETF Trust, you can compare the effects of market volatilities on WisdomTree Trust and DBX ETF 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 Trust with a short position of DBX ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Trust and DBX ETF.
Diversification Opportunities for WisdomTree Trust and DBX ETF
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WisdomTree and DBX is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Trust and DBX ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBX ETF Trust and WisdomTree Trust 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 Trust are associated (or correlated) with DBX ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBX ETF Trust has no effect on the direction of WisdomTree Trust i.e., WisdomTree Trust and DBX ETF go up and down completely randomly.
Pair Corralation between WisdomTree Trust and DBX ETF
Considering the 90-day investment horizon WisdomTree Trust is expected to generate 1.04 times more return on investment than DBX ETF. However, WisdomTree Trust is 1.04 times more volatile than DBX ETF Trust. It trades about 0.16 of its potential returns per unit of risk. DBX ETF Trust is currently generating about 0.09 per unit of risk. If you would invest 8,384 in WisdomTree Trust on June 4, 2025 and sell it today you would earn a total of 635.00 from holding WisdomTree Trust or generate 7.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.41% |
| Values | Daily Returns |
WisdomTree Trust vs. DBX ETF Trust
Performance |
| Timeline |
| WisdomTree Trust |
| DBX ETF Trust |
WisdomTree Trust and DBX ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Trust and DBX ETF
The main advantage of trading using opposite WisdomTree Trust and DBX ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Trust position performs unexpectedly, DBX ETF 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 DBX ETF will offset losses from the drop in DBX ETF's long position.| WisdomTree Trust vs. Invesco SP MidCap | WisdomTree Trust vs. Invesco SP MidCap | WisdomTree Trust vs. Invesco SP 500 | WisdomTree Trust vs. Vanguard Value Factor |
| DBX ETF vs. Strategy Shares | DBX ETF vs. Freedom Day Dividend | DBX ETF vs. Franklin Templeton ETF | DBX ETF 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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