Correlation Between First Trust and WisdomTree Issuer
Can any of the company-specific risk be diversified away by investing in both First Trust and WisdomTree Issuer 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 Issuer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust IPOX and WisdomTree Issuer ICAV, you can compare the effects of market volatilities on First Trust and WisdomTree Issuer 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 Issuer. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and WisdomTree Issuer.
Diversification Opportunities for First Trust and WisdomTree Issuer
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and WisdomTree is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding First Trust IPOX and WisdomTree Issuer ICAV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Issuer ICAV 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 IPOX are associated (or correlated) with WisdomTree Issuer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Issuer ICAV has no effect on the direction of First Trust i.e., First Trust and WisdomTree Issuer go up and down completely randomly.
Pair Corralation between First Trust and WisdomTree Issuer
Given the investment horizon of 90 days First Trust IPOX is expected to generate 1.84 times more return on investment than WisdomTree Issuer. However, First Trust is 1.84 times more volatile than WisdomTree Issuer ICAV. It trades about 0.21 of its potential returns per unit of risk. WisdomTree Issuer ICAV is currently generating about 0.21 per unit of risk. If you would invest 3,012 in First Trust IPOX on November 25, 2025 and sell it today you would earn a total of 346.00 from holding First Trust IPOX or generate 11.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust IPOX vs. WisdomTree Issuer ICAV
Performance |
| Timeline |
| First Trust IPOX |
| WisdomTree Issuer ICAV |
First Trust and WisdomTree Issuer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and WisdomTree Issuer
The main advantage of trading using opposite First Trust and WisdomTree Issuer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, WisdomTree Issuer 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 Issuer will offset losses from the drop in WisdomTree Issuer's long position.| First Trust vs. First Trust Exchange Traded | First Trust vs. Virtus Duff Phelps | First Trust vs. Direxion All Cap | First Trust vs. Franklin Dividend Growth |
| WisdomTree Issuer vs. Vanguard Total Stock | WisdomTree Issuer vs. SPDR SP 500 | WisdomTree Issuer vs. iShares Core SP | WisdomTree Issuer vs. Vanguard Total Bond |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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