Correlation Between First Trust and WisdomTree Emerging
Can any of the company-specific risk be diversified away by investing in both First Trust and WisdomTree Emerging 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 Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Bloomberg and WisdomTree Emerging Markets, you can compare the effects of market volatilities on First Trust and WisdomTree Emerging 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 Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and WisdomTree Emerging.
Diversification Opportunities for First Trust and WisdomTree Emerging
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and WisdomTree is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Bloomberg and WisdomTree Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Emerging 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 Bloomberg are associated (or correlated) with WisdomTree Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Emerging has no effect on the direction of First Trust i.e., First Trust and WisdomTree Emerging go up and down completely randomly.
Pair Corralation between First Trust and WisdomTree Emerging
Given the investment horizon of 90 days First Trust is expected to generate 1.71 times less return on investment than WisdomTree Emerging. In addition to that, First Trust is 2.57 times more volatile than WisdomTree Emerging Markets. It trades about 0.04 of its total potential returns per unit of risk. WisdomTree Emerging Markets is currently generating about 0.17 per unit of volatility. If you would invest 4,622 in WisdomTree Emerging Markets on September 28, 2025 and sell it today you would earn a total of 62.00 from holding WisdomTree Emerging Markets or generate 1.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
First Trust Bloomberg vs. WisdomTree Emerging Markets
Performance |
| Timeline |
| First Trust Bloomberg |
| WisdomTree Emerging |
First Trust and WisdomTree Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and WisdomTree Emerging
The main advantage of trading using opposite First Trust and WisdomTree Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, WisdomTree Emerging 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 Emerging will offset losses from the drop in WisdomTree Emerging's long position.| First Trust vs. Ned Davis Research | First Trust vs. Unlimited HFEQ Equity | First Trust vs. Themes Infrastructure ETF | First Trust vs. Horizon Funds |
| WisdomTree Emerging vs. WisdomTree MidCap Dividend | WisdomTree Emerging vs. iShares Home Construction | WisdomTree Emerging vs. iShares MSCI All | WisdomTree Emerging vs. WisdomTree India Earnings |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |