Correlation Between First Trust and WisdomTree Efficient
Can any of the company-specific risk be diversified away by investing in both First Trust and WisdomTree Efficient 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 First Trust and WisdomTree Efficient into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Exchange Traded and WisdomTree Efficient Gold, you can compare the effects of market volatilities on First Trust and WisdomTree Efficient 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 First Trust with a short position of WisdomTree Efficient. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and WisdomTree Efficient.
Diversification Opportunities for First Trust and WisdomTree Efficient
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and WisdomTree is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Exchange Traded and WisdomTree Efficient Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Efficient Gold and First Trust 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 First Trust Exchange Traded are associated (or correlated) with WisdomTree Efficient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Efficient Gold has no effect on the direction of First Trust i.e., First Trust and WisdomTree Efficient go up and down completely randomly.
Pair Corralation between First Trust and WisdomTree Efficient
Given the investment horizon of 90 days First Trust is expected to generate 5.04 times less return on investment than WisdomTree Efficient. But when comparing it to its historical volatility, First Trust Exchange Traded is 3.11 times less risky than WisdomTree Efficient. It trades about 0.09 of its potential returns per unit of risk. WisdomTree Efficient Gold is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,385 in WisdomTree Efficient Gold on September 30, 2025 and sell it today you would earn a total of 4,144 from holding WisdomTree Efficient Gold or generate 173.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
First Trust Exchange Traded vs. WisdomTree Efficient Gold
Performance |
| Timeline |
| First Trust Exchange |
| WisdomTree Efficient Gold |
First Trust and WisdomTree Efficient Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and WisdomTree Efficient
The main advantage of trading using opposite First Trust and WisdomTree Efficient positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, WisdomTree Efficient 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 Efficient will offset losses from the drop in WisdomTree Efficient's long position.| First Trust vs. FT Cboe Vest | First Trust vs. First Trust Exchange Traded | First Trust vs. First Trust Exchange Traded | First Trust vs. FT Cboe Vest |
| WisdomTree Efficient vs. Running Oak Efficient | WisdomTree Efficient vs. Adaptive Alpha Opportunities | WisdomTree Efficient vs. Professionally Managed Portfolios | WisdomTree Efficient vs. IQ Candriam ESG |
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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |