Correlation Between First Trust and WisdomTree Corporate
Can any of the company-specific risk be diversified away by investing in both First Trust and WisdomTree Corporate 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 Corporate 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 Corporate Bond, you can compare the effects of market volatilities on First Trust and WisdomTree Corporate 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 Corporate. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and WisdomTree Corporate.
Diversification Opportunities for First Trust and WisdomTree Corporate
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and WisdomTree is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Exchange Traded and WisdomTree Corporate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Corporate Bond 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 Corporate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Corporate Bond has no effect on the direction of First Trust i.e., First Trust and WisdomTree Corporate go up and down completely randomly.
Pair Corralation between First Trust and WisdomTree Corporate
Given the investment horizon of 90 days First Trust Exchange Traded is expected to generate 3.46 times more return on investment than WisdomTree Corporate. However, First Trust is 3.46 times more volatile than WisdomTree Corporate Bond. It trades about 0.31 of its potential returns per unit of risk. WisdomTree Corporate Bond is currently generating about 0.12 per unit of risk. If you would invest 2,055 in First Trust Exchange Traded on November 22, 2025 and sell it today you would earn a total of 253.00 from holding First Trust Exchange Traded or generate 12.31% 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 Corporate Bond
Performance |
| Timeline |
| First Trust Exchange |
| WisdomTree Corporate Bond |
First Trust and WisdomTree Corporate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and WisdomTree Corporate
The main advantage of trading using opposite First Trust and WisdomTree Corporate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, WisdomTree Corporate 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 Corporate will offset losses from the drop in WisdomTree Corporate's long position.| First Trust vs. Global X Alternative | First Trust vs. Pacer Swan SOS | First Trust vs. Strategy Shares | First Trust vs. Relative Sentiment Tactical |
| WisdomTree Corporate vs. WisdomTree 1 3 Year | WisdomTree Corporate vs. iShares MSCI Belgium | WisdomTree Corporate vs. AIM ETF Products | WisdomTree Corporate vs. WisdomTree High Yield |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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