Correlation Between First Trust and WisdomTree High
Can any of the company-specific risk be diversified away by investing in both First Trust and WisdomTree High 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 High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Exchange Traded and WisdomTree High Dividend, you can compare the effects of market volatilities on First Trust and WisdomTree High 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 High. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and WisdomTree High.
Diversification Opportunities for First Trust and WisdomTree High
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 Exchange Traded and WisdomTree High Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree High Dividend 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 Exchange Traded are associated (or correlated) with WisdomTree High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree High Dividend has no effect on the direction of First Trust i.e., First Trust and WisdomTree High go up and down completely randomly.
Pair Corralation between First Trust and WisdomTree High
Given the investment horizon of 90 days First Trust is expected to generate 2.0 times less return on investment than WisdomTree High. In addition to that, First Trust is 1.47 times more volatile than WisdomTree High Dividend. It trades about 0.08 of its total potential returns per unit of risk. WisdomTree High Dividend is currently generating about 0.22 per unit of volatility. If you would invest 10,214 in WisdomTree High Dividend on October 23, 2025 and sell it today you would earn a total of 268.00 from holding WisdomTree High Dividend or generate 2.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Exchange Traded vs. WisdomTree High Dividend
Performance |
| Timeline |
| First Trust Exchange |
| WisdomTree High Dividend |
First Trust and WisdomTree High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and WisdomTree High
The main advantage of trading using opposite First Trust and WisdomTree High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, WisdomTree High 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 High will offset losses from the drop in WisdomTree High's long position.| First Trust vs. EA Series Trust | First Trust vs. Even Herd Long | First Trust vs. Elevation Series Trust | First Trust vs. IDX Dynamic Fixed |
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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 Positions Ratings module to 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.
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