Correlation Between WisdomTree Efficient and First Trust
Can any of the company-specific risk be diversified away by investing in both WisdomTree Efficient and First Trust 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 WisdomTree Efficient and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Efficient Gold and First Trust Value, you can compare the effects of market volatilities on WisdomTree Efficient and First Trust 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 WisdomTree Efficient with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Efficient and First Trust.
Diversification Opportunities for WisdomTree Efficient and First Trust
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WisdomTree and First is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Efficient Gold and First Trust Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Value and WisdomTree Efficient 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 WisdomTree Efficient Gold are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Value has no effect on the direction of WisdomTree Efficient i.e., WisdomTree Efficient and First Trust go up and down completely randomly.
Pair Corralation between WisdomTree Efficient and First Trust
Given the investment horizon of 90 days WisdomTree Efficient Gold is expected to generate 9.23 times more return on investment than First Trust. However, WisdomTree Efficient is 9.23 times more volatile than First Trust Value. It trades about 0.17 of its potential returns per unit of risk. First Trust Value is currently generating about 0.23 per unit of risk. If you would invest 8,695 in WisdomTree Efficient Gold on November 26, 2025 and sell it today you would earn a total of 4,510 from holding WisdomTree Efficient Gold or generate 51.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.33% |
| Values | Daily Returns |
WisdomTree Efficient Gold vs. First Trust Value
Performance |
| Timeline |
| WisdomTree Efficient Gold |
| First Trust Value |
WisdomTree Efficient and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Efficient and First Trust
The main advantage of trading using opposite WisdomTree Efficient and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Efficient position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| WisdomTree Efficient vs. Exchange Listed Funds | WisdomTree Efficient vs. WisdomTree Global High | WisdomTree Efficient vs. iShares Genomics Immunology | WisdomTree Efficient vs. 2023 EFT Series |
| First Trust vs. Schwab Fundamental Small | First Trust vs. iShares Global Infrastructure | First Trust vs. Invesco FTSE RAFI | First Trust vs. iShares MSCI USA |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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