Correlation Between First Trust and WisdomTree China
Can any of the company-specific risk be diversified away by investing in both First Trust and WisdomTree China 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 China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Dividend and WisdomTree China ex State Owned, you can compare the effects of market volatilities on First Trust and WisdomTree China 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 China. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and WisdomTree China.
Diversification Opportunities for First Trust and WisdomTree China
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and WisdomTree is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Dividend and WisdomTree China ex State Owne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree China 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 Dividend are associated (or correlated) with WisdomTree China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree China has no effect on the direction of First Trust i.e., First Trust and WisdomTree China go up and down completely randomly.
Pair Corralation between First Trust and WisdomTree China
Given the investment horizon of 90 days First Trust Dividend is expected to generate 0.75 times more return on investment than WisdomTree China. However, First Trust Dividend is 1.34 times less risky than WisdomTree China. It trades about 0.18 of its potential returns per unit of risk. WisdomTree China ex State Owned is currently generating about -0.1 per unit of risk. If you would invest 5,638 in First Trust Dividend on December 5, 2025 and sell it today you would earn a total of 562.00 from holding First Trust Dividend or generate 9.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Dividend vs. WisdomTree China ex State Owne
Performance |
| Timeline |
| First Trust Dividend |
| WisdomTree China |
First Trust and WisdomTree China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and WisdomTree China
The main advantage of trading using opposite First Trust and WisdomTree China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, WisdomTree China 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 China will offset losses from the drop in WisdomTree China's long position.| First Trust vs. Matthews China Active | First Trust vs. Innovator ETFs Trust | First Trust vs. First Trust Asia | First Trust vs. Jpmorgan Active Small |
| WisdomTree China vs. WisdomTree International Equity | WisdomTree China vs. iShares Morningstar Small Cap | WisdomTree China vs. WisdomTree SmallCap Earnings | WisdomTree China vs. Longview Advantage ETF |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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