Correlation Between WisdomTree Emerging and First Trust
Can any of the company-specific risk be diversified away by investing in both WisdomTree Emerging 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 Emerging 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 Emerging Markets and First Trust Dow, you can compare the effects of market volatilities on WisdomTree Emerging 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 Emerging with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Emerging and First Trust.
Diversification Opportunities for WisdomTree Emerging and First Trust
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WisdomTree and First is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Emerging Markets and First Trust Dow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Dow and WisdomTree Emerging 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 Emerging Markets 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 Dow has no effect on the direction of WisdomTree Emerging i.e., WisdomTree Emerging and First Trust go up and down completely randomly.
Pair Corralation between WisdomTree Emerging and First Trust
Considering the 90-day investment horizon WisdomTree Emerging Markets is expected to generate 0.57 times more return on investment than First Trust. However, WisdomTree Emerging Markets is 1.76 times less risky than First Trust. It trades about 0.16 of its potential returns per unit of risk. First Trust Dow is currently generating about -0.2 per unit of risk. If you would invest 5,665 in WisdomTree Emerging Markets on December 4, 2025 and sell it today you would earn a total of 499.00 from holding WisdomTree Emerging Markets or generate 8.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.36% |
| Values | Daily Returns |
WisdomTree Emerging Markets vs. First Trust Dow
Performance |
| Timeline |
| WisdomTree Emerging |
| First Trust Dow |
WisdomTree Emerging and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Emerging and First Trust
The main advantage of trading using opposite WisdomTree Emerging and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Emerging 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 Emerging vs. WisdomTree SmallCap Dividend | WisdomTree Emerging vs. Freedom 100 Emerging | WisdomTree Emerging vs. WisdomTree High Dividend | WisdomTree Emerging vs. Invesco FTSE RAFI |
| First Trust vs. REX VolMAXX Long | First Trust vs. Sonora Resources Corp | First Trust vs. First Trust Active | First Trust vs. Franklin FTSE Germany |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Global Correlations Find global opportunities by holding instruments from different markets |