Correlation Between First Trust and WisdomTree Managed
Can any of the company-specific risk be diversified away by investing in both First Trust and WisdomTree Managed 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 Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust NASDAQ and WisdomTree Managed Futures, you can compare the effects of market volatilities on First Trust and WisdomTree Managed 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 Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and WisdomTree Managed.
Diversification Opportunities for First Trust and WisdomTree Managed
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and WisdomTree is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding First Trust NASDAQ and WisdomTree Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Managed 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 NASDAQ are associated (or correlated) with WisdomTree Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Managed has no effect on the direction of First Trust i.e., First Trust and WisdomTree Managed go up and down completely randomly.
Pair Corralation between First Trust and WisdomTree Managed
Given the investment horizon of 90 days First Trust NASDAQ is expected to generate 1.34 times more return on investment than WisdomTree Managed. However, First Trust is 1.34 times more volatile than WisdomTree Managed Futures. It trades about 0.29 of its potential returns per unit of risk. WisdomTree Managed Futures is currently generating about 0.11 per unit of risk. If you would invest 15,060 in First Trust NASDAQ on November 30, 2025 and sell it today you would earn a total of 2,725 from holding First Trust NASDAQ or generate 18.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust NASDAQ vs. WisdomTree Managed Futures
Performance |
| Timeline |
| First Trust NASDAQ |
| WisdomTree Managed |
First Trust and WisdomTree Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and WisdomTree Managed
The main advantage of trading using opposite First Trust and WisdomTree Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, WisdomTree Managed 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 Managed will offset losses from the drop in WisdomTree Managed's long position.| First Trust vs. First Trust North | First Trust vs. First Trust Cloud | First Trust vs. The 2023 ETF | First Trust vs. Xtrackers MSCI USA |
| WisdomTree Managed vs. Elevation Series Trust | WisdomTree Managed vs. Exchange Traded Concepts | WisdomTree Managed vs. Innovator MSCI EAFE | WisdomTree Managed vs. VanEck Inflation Allocation |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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