Correlation Between First Trust and WisdomTree Inflation
Can any of the company-specific risk be diversified away by investing in both First Trust and WisdomTree Inflation 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 Inflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Global and WisdomTree Inflation Plus, you can compare the effects of market volatilities on First Trust and WisdomTree Inflation 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 Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and WisdomTree Inflation.
Diversification Opportunities for First Trust and WisdomTree Inflation
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and WisdomTree is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Global and WisdomTree Inflation Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Inflation Plus 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 Global are associated (or correlated) with WisdomTree Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Inflation Plus has no effect on the direction of First Trust i.e., First Trust and WisdomTree Inflation go up and down completely randomly.
Pair Corralation between First Trust and WisdomTree Inflation
Given the investment horizon of 90 days First Trust Global is expected to generate 0.91 times more return on investment than WisdomTree Inflation. However, First Trust Global is 1.1 times less risky than WisdomTree Inflation. It trades about 0.12 of its potential returns per unit of risk. WisdomTree Inflation Plus is currently generating about 0.1 per unit of risk. If you would invest 2,345 in First Trust Global on November 30, 2025 and sell it today you would earn a total of 206.00 from holding First Trust Global or generate 8.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Global vs. WisdomTree Inflation Plus
Performance |
| Timeline |
| First Trust Global |
| WisdomTree Inflation Plus |
First Trust and WisdomTree Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and WisdomTree Inflation
The main advantage of trading using opposite First Trust and WisdomTree Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, WisdomTree Inflation 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 Inflation will offset losses from the drop in WisdomTree Inflation's long position.| First Trust vs. Global X SuperDividend | First Trust vs. GraniteShares 2x Long | First Trust vs. WisdomTree International SmallCap | First Trust vs. ProShares SP 500 |
| WisdomTree Inflation vs. Global X SuperDividend | WisdomTree Inflation vs. GraniteShares 2x Long | WisdomTree Inflation vs. WisdomTree International SmallCap | WisdomTree Inflation vs. ProShares SP 500 |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |