Correlation Between First Trust and WisdomTree New
Can any of the company-specific risk be diversified away by investing in both First Trust and WisdomTree New 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 New 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 New Economy, you can compare the effects of market volatilities on First Trust and WisdomTree New 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 New. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and WisdomTree New.
Diversification Opportunities for First Trust and WisdomTree New
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 New Economy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree New Economy 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 New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree New Economy has no effect on the direction of First Trust i.e., First Trust and WisdomTree New go up and down completely randomly.
Pair Corralation between First Trust and WisdomTree New
Given the investment horizon of 90 days First Trust is expected to generate 1.07 times less return on investment than WisdomTree New. But when comparing it to its historical volatility, First Trust Exchange Traded is 2.03 times less risky than WisdomTree New. It trades about 0.29 of its potential returns per unit of risk. WisdomTree New Economy is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,106 in WisdomTree New Economy on November 18, 2025 and sell it today you would earn a total of 267.00 from holding WisdomTree New Economy or generate 12.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Exchange Traded vs. WisdomTree New Economy
Performance |
| Timeline |
| First Trust Exchange |
| WisdomTree New Economy |
First Trust and WisdomTree New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and WisdomTree New
The main advantage of trading using opposite First Trust and WisdomTree New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, WisdomTree New 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 New will offset losses from the drop in WisdomTree New's long position.| First Trust vs. AllianzIM Large Cap | First Trust vs. Invesco Bloomberg MVP | First Trust vs. ABLD | First Trust vs. Aptus Drawdown Managed |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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