Correlation Between WisdomTree Earnings and First Trust
Can any of the company-specific risk be diversified away by investing in both WisdomTree Earnings 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 Earnings 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 Earnings 500 and First Trust Growth, you can compare the effects of market volatilities on WisdomTree Earnings 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 Earnings with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Earnings and First Trust.
Diversification Opportunities for WisdomTree Earnings and First Trust
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between WisdomTree and First is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Earnings 500 and First Trust Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Growth and WisdomTree Earnings 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 Earnings 500 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 Growth has no effect on the direction of WisdomTree Earnings i.e., WisdomTree Earnings and First Trust go up and down completely randomly.
Pair Corralation between WisdomTree Earnings and First Trust
Considering the 90-day investment horizon WisdomTree Earnings is expected to generate 2.36 times less return on investment than First Trust. But when comparing it to its historical volatility, WisdomTree Earnings 500 is 1.04 times less risky than First Trust. It trades about 0.09 of its potential returns per unit of risk. First Trust Growth is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 3,514 in First Trust Growth on September 28, 2025 and sell it today you would earn a total of 80.00 from holding First Trust Growth or generate 2.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Earnings 500 vs. First Trust Growth
Performance |
| Timeline |
| WisdomTree Earnings 500 |
| First Trust Growth |
WisdomTree Earnings and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Earnings and First Trust
The main advantage of trading using opposite WisdomTree Earnings and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Earnings 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 Earnings vs. WisdomTree High Dividend | WisdomTree Earnings vs. iShares Consumer Staples | WisdomTree Earnings vs. iShares MSCI Switzerland | WisdomTree Earnings vs. Direxion NASDAQ 100 Equal |
| First Trust vs. Vanguard Russell 2000 | First Trust vs. Direxion NASDAQ 100 Equal | First Trust vs. Kovitz Core Equity | First Trust vs. Pacer Funds Trust |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |