Correlation Between WisdomTree SmallCap and First Trust
Can any of the company-specific risk be diversified away by investing in both WisdomTree SmallCap and First Trust 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 SmallCap and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree SmallCap Dividend and First Trust Active, you can compare the effects of market volatilities on WisdomTree SmallCap and First Trust 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 SmallCap with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree SmallCap and First Trust.
Diversification Opportunities for WisdomTree SmallCap and First Trust
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WisdomTree and First is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree SmallCap Dividend and First Trust Active in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Active and WisdomTree SmallCap 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 SmallCap Dividend are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Active has no effect on the direction of WisdomTree SmallCap i.e., WisdomTree SmallCap and First Trust go up and down completely randomly.
Pair Corralation between WisdomTree SmallCap and First Trust
Considering the 90-day investment horizon WisdomTree SmallCap Dividend is expected to generate 1.06 times more return on investment than First Trust. However, WisdomTree SmallCap is 1.06 times more volatile than First Trust Active. It trades about 0.17 of its potential returns per unit of risk. First Trust Active is currently generating about 0.1 per unit of risk. If you would invest 3,331 in WisdomTree SmallCap Dividend on December 2, 2025 and sell it today you would earn a total of 373.00 from holding WisdomTree SmallCap Dividend or generate 11.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
WisdomTree SmallCap Dividend vs. First Trust Active
Performance |
| Timeline |
| WisdomTree SmallCap |
| First Trust Active |
WisdomTree SmallCap and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree SmallCap and First Trust
The main advantage of trading using opposite WisdomTree SmallCap and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree SmallCap position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| WisdomTree SmallCap vs. WisdomTree Emerging Markets | WisdomTree SmallCap vs. WisdomTree Europe Hedged | WisdomTree SmallCap vs. iShares Global Energy | WisdomTree SmallCap vs. iShares Financial Services |
| First Trust vs. Sonora Resources Corp | First Trust vs. REX VolMAXX Long | First Trust vs. iShares AsiaPacific Dividend | First Trust vs. First Trust Dow |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |