Correlation Between First Trust and WisdomTree International
Can any of the company-specific risk be diversified away by investing in both First Trust and WisdomTree International 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 International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Mid and WisdomTree International Hedged, you can compare the effects of market volatilities on First Trust and WisdomTree International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and WisdomTree International.
Diversification Opportunities for First Trust and WisdomTree International
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and WisdomTree is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Mid and WisdomTree International Hedge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree International 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 Mid are associated (or correlated) with WisdomTree International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree International has no effect on the direction of First Trust i.e., First Trust and WisdomTree International go up and down completely randomly.
Pair Corralation between First Trust and WisdomTree International
Considering the 90-day investment horizon First Trust Mid is expected to generate 1.22 times more return on investment than WisdomTree International. However, First Trust is 1.22 times more volatile than WisdomTree International Hedged. It trades about 0.16 of its potential returns per unit of risk. WisdomTree International Hedged is currently generating about 0.19 per unit of risk. If you would invest 5,513 in First Trust Mid on November 27, 2025 and sell it today you would earn a total of 494.00 from holding First Trust Mid or generate 8.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.33% |
| Values | Daily Returns |
First Trust Mid vs. WisdomTree International Hedge
Performance |
| Timeline |
| First Trust Mid |
| WisdomTree International |
First Trust and WisdomTree International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and WisdomTree International
The main advantage of trading using opposite First Trust and WisdomTree International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, WisdomTree International 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 International will offset losses from the drop in WisdomTree International's long position.| First Trust vs. First Trust Japan | First Trust vs. First Trust Materials | First Trust vs. First Trust Small | First Trust vs. iShares Intl High |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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