We investigate whether instability-generated structure of line-driven stellar winds can account for the emission line profile variability (LPV) observed in hot star spectra. In a previous paper, we introduced a three-dimensional (3D) ``patch'' method to compute the temporal evolution of the wind emissivity, based on 1D radiation hydrodynamics simulations. Here we apply a wavelet analysis to these synthetic LPVs, allowing a direct comparison with observations analysed in the same way, with particular focus on the characteristic velocity scale of LPVs at various frequency locations within the line profile. Wavelet analyses of observed LPV generally show this scale to increase from 50 to 100-200 km s-1 from line-centre to edge. We argue here that the characteristic sub-peak broadening is dominated at line-centre by the lateral spatial extent of wind structures, while at line-edge it is controlled by their intrinsic radial velocity dispersion. We find that the wavelet transforms of synthetic LPV yield characteristic widths that are comparable to observed values at line-centre, but much narrower at line-edges. We thus conclude that the patch size of 3 deg assumed here provides a reasonable representation of the lateral coherence length associated with observed LPV, but that the 1D instability models that form the basis of the patch method have too low a radial velocity dispersion to reproduce the characteristic widths observed at line edge. We discuss how the latter limitation might be overcome by inclusion of radial velocity shear, and also outline possible approaches to developing multi-dimensional instability simulations that could account for such shear effects.