Correlation Between First Trust and WisdomTree Floating
Can any of the company-specific risk be diversified away by investing in both First Trust and WisdomTree Floating 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 Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Capital and WisdomTree Floating Rate, you can compare the effects of market volatilities on First Trust and WisdomTree Floating 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 Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and WisdomTree Floating.
Diversification Opportunities for First Trust and WisdomTree Floating
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 Capital and WisdomTree Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Floating Rate 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 Capital are associated (or correlated) with WisdomTree Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Floating Rate has no effect on the direction of First Trust i.e., First Trust and WisdomTree Floating go up and down completely randomly.
Pair Corralation between First Trust and WisdomTree Floating
Given the investment horizon of 90 days First Trust Capital is expected to generate 36.95 times more return on investment than WisdomTree Floating. However, First Trust is 36.95 times more volatile than WisdomTree Floating Rate. It trades about 0.19 of its potential returns per unit of risk. WisdomTree Floating Rate is currently generating about 1.09 per unit of risk. If you would invest 9,243 in First Trust Capital on November 28, 2025 and sell it today you would earn a total of 594.00 from holding First Trust Capital or generate 6.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.36% |
| Values | Daily Returns |
First Trust Capital vs. WisdomTree Floating Rate
Performance |
| Timeline |
| First Trust Capital |
| WisdomTree Floating Rate |
First Trust and WisdomTree Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and WisdomTree Floating
The main advantage of trading using opposite First Trust and WisdomTree Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, WisdomTree Floating 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 Floating will offset losses from the drop in WisdomTree Floating's long position.| First Trust vs. Invesco FTSE RAFI | First Trust vs. Schwab REIT ETF | First Trust vs. iShares Global Infrastructure | First Trust vs. Vanguard Consumer Staples |
| WisdomTree Floating vs. WisdomTree Quality Dividend | WisdomTree Floating vs. iShares MSCI Japan | WisdomTree Floating vs. iShares Russell 3000 | WisdomTree Floating vs. iShares 3 7 Year |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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