Correlation Between First Trust and WisdomTree Earnings
Can any of the company-specific risk be diversified away by investing in both First Trust and WisdomTree Earnings 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 Earnings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Horizon and WisdomTree Earnings 500, you can compare the effects of market volatilities on First Trust and WisdomTree Earnings 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 Earnings. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and WisdomTree Earnings.
Diversification Opportunities for First Trust and WisdomTree Earnings
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and WisdomTree is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Horizon and WisdomTree Earnings 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Earnings 500 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 Horizon are associated (or correlated) with WisdomTree Earnings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Earnings 500 has no effect on the direction of First Trust i.e., First Trust and WisdomTree Earnings go up and down completely randomly.
Pair Corralation between First Trust and WisdomTree Earnings
Given the investment horizon of 90 days First Trust Horizon is expected to generate 0.8 times more return on investment than WisdomTree Earnings. However, First Trust Horizon is 1.25 times less risky than WisdomTree Earnings. It trades about 0.32 of its potential returns per unit of risk. WisdomTree Earnings 500 is currently generating about 0.02 per unit of risk. If you would invest 3,475 in First Trust Horizon on December 3, 2025 and sell it today you would earn a total of 378.00 from holding First Trust Horizon or generate 10.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Horizon vs. WisdomTree Earnings 500
Performance |
| Timeline |
| First Trust Horizon |
| WisdomTree Earnings 500 |
First Trust and WisdomTree Earnings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and WisdomTree Earnings
The main advantage of trading using opposite First Trust and WisdomTree Earnings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, WisdomTree Earnings 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 Earnings will offset losses from the drop in WisdomTree Earnings' long position.| First Trust vs. First Trust Horizon | First Trust vs. Franklin FTSE Saudi | First Trust vs. Neuberger Berman Energy | First Trust vs. Themes Gold Miners |
| WisdomTree Earnings vs. WisdomTree High Dividend | WisdomTree Earnings vs. iShares Consumer Staples | WisdomTree Earnings vs. iShares MSCI Switzerland | WisdomTree Earnings vs. Direxion NASDAQ 100 Equal |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |