Correlation Between EXT and WisdomTree Europe

Can any of the company-specific risk be diversified away by investing in both EXT and WisdomTree Europe 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 EXT and WisdomTree Europe into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EXT and WisdomTree Europe Hedged, you can compare the effects of market volatilities on EXT and WisdomTree Europe 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 EXT with a short position of WisdomTree Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of EXT and WisdomTree Europe.

Diversification Opportunities for EXT and WisdomTree Europe

0.0

Correlation Coefficient

EXT  WisdomTree Europe

Pay attention - limited upside

The 3 months correlation between EXT and WisdomTree is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EXT and WisdomTree Europe Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Europe Hedged and EXT 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 EXT are associated (or correlated) with WisdomTree Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Europe Hedged has no effect on the direction of EXT i.e., EXT and WisdomTree Europe go up and down completely randomly.

Pair Corralation between EXT and WisdomTree Europe

If you would invest  4,635  in WisdomTree Europe Hedged on October 2, 2025 and sell it today you would earn a total of  0.00  from holding WisdomTree Europe Hedged or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

EXT  vs.  WisdomTree Europe Hedged

EXT

Risk-Adjusted Performance

Weakest

Over the last 90 days EXT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, EXT is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

WisdomTree Europe Hedged

Risk-Adjusted Performance

Weakest

Over the last 90 days WisdomTree Europe Hedged has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, WisdomTree Europe is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with EXT and WisdomTree Europe

The main advantage of trading using opposite EXT and WisdomTree Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EXT position performs unexpectedly, WisdomTree Europe 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 Europe will offset losses from the drop in WisdomTree Europe's long position.

The idea behind EXT and WisdomTree Europe Hedged pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.