Correlation Between First Trust and WisdomTree India
Can any of the company-specific risk be diversified away by investing in both First Trust and WisdomTree India 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 India into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust India and WisdomTree India Earnings, you can compare the effects of market volatilities on First Trust and WisdomTree India 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 India. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and WisdomTree India.
Diversification Opportunities for First Trust and WisdomTree India
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and WisdomTree is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding First Trust India and WisdomTree India Earnings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree India Earnings 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 India are associated (or correlated) with WisdomTree India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree India Earnings has no effect on the direction of First Trust i.e., First Trust and WisdomTree India go up and down completely randomly.
Pair Corralation between First Trust and WisdomTree India
Given the investment horizon of 90 days First Trust is expected to generate 1.14 times less return on investment than WisdomTree India. But when comparing it to its historical volatility, First Trust India is 1.07 times less risky than WisdomTree India. It trades about 0.26 of its potential returns per unit of risk. WisdomTree India Earnings is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 4,495 in WisdomTree India Earnings on October 8, 2025 and sell it today you would earn a total of 163.00 from holding WisdomTree India Earnings or generate 3.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust India vs. WisdomTree India Earnings
Performance |
| Timeline |
| First Trust India |
| WisdomTree India Earnings |
First Trust and WisdomTree India Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and WisdomTree India
The main advantage of trading using opposite First Trust and WisdomTree India positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, WisdomTree India 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 India will offset losses from the drop in WisdomTree India's long position.| First Trust vs. Astoria Quality Kings | First Trust vs. AdvisorShares Focused Equity | First Trust vs. Invesco India ETF | First Trust vs. YieldMax Crypto Industry |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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