Correlation Between WisdomTree High and First Trust
Can any of the company-specific risk be diversified away by investing in both WisdomTree High 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 High 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 High Dividend and First Trust Mid, you can compare the effects of market volatilities on WisdomTree High 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 High with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree High and First Trust.
Diversification Opportunities for WisdomTree High and First Trust
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WisdomTree and First is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree High Dividend and First Trust Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Mid and WisdomTree High 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 High 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 Mid has no effect on the direction of WisdomTree High i.e., WisdomTree High and First Trust go up and down completely randomly.
Pair Corralation between WisdomTree High and First Trust
Considering the 90-day investment horizon WisdomTree High is expected to generate 1.05 times less return on investment than First Trust. But when comparing it to its historical volatility, WisdomTree High Dividend is 1.55 times less risky than First Trust. It trades about 0.34 of its potential returns per unit of risk. First Trust Mid is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 11,894 in First Trust Mid on November 18, 2025 and sell it today you would earn a total of 1,745 from holding First Trust Mid or generate 14.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree High Dividend vs. First Trust Mid
Performance |
| Timeline |
| WisdomTree High Dividend |
| First Trust Mid |
WisdomTree High and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree High and First Trust
The main advantage of trading using opposite WisdomTree High and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree High 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 High vs. WisdomTree Earnings 500 | WisdomTree High vs. Pacer Developed Markets | WisdomTree High vs. iShares Consumer Staples | WisdomTree High vs. iShares MSCI Switzerland |
| First Trust vs. First Trust Large | First Trust vs. First Trust Large | First Trust vs. First Trust Large | First Trust vs. First Trust Small |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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