Correlation Between First Trust and WisdomTree Global
Can any of the company-specific risk be diversified away by investing in both First Trust and WisdomTree Global 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 Global 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 Global ex US, you can compare the effects of market volatilities on First Trust and WisdomTree Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and WisdomTree Global.
Diversification Opportunities for First Trust and WisdomTree Global
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and WisdomTree is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Exchange Traded and WisdomTree Global ex US in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Global 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Global has no effect on the direction of First Trust i.e., First Trust and WisdomTree Global go up and down completely randomly.
Pair Corralation between First Trust and WisdomTree Global
Given the investment horizon of 90 days First Trust is expected to generate 3.01 times less return on investment than WisdomTree Global. But when comparing it to its historical volatility, First Trust Exchange Traded is 3.96 times less risky than WisdomTree Global. It trades about 0.16 of its potential returns per unit of risk. WisdomTree Global ex US is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,017 in WisdomTree Global ex US on November 4, 2025 and sell it today you would earn a total of 270.00 from holding WisdomTree Global ex US or generate 6.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Exchange Traded vs. WisdomTree Global ex US
Performance |
| Timeline |
| First Trust Exchange |
| WisdomTree Global |
First Trust and WisdomTree Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and WisdomTree Global
The main advantage of trading using opposite First Trust and WisdomTree Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, WisdomTree Global 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 Global will offset losses from the drop in WisdomTree Global's long position.| First Trust vs. First Trust Exchange Traded | First Trust vs. FT Cboe Vest | First Trust vs. FT Cboe Vest | First Trust vs. First Trust Exchange Traded |
| WisdomTree Global vs. WisdomTree International High | WisdomTree Global vs. iShares Global Comm | WisdomTree Global vs. FlexShares Quality Dividend | WisdomTree Global vs. WisdomTree China ex State Owned |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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