Correlation Between WisdomTree 9060 and First Trust
Can any of the company-specific risk be diversified away by investing in both WisdomTree 9060 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 9060 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 9060 Balanced and First Trust Large, you can compare the effects of market volatilities on WisdomTree 9060 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 9060 with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree 9060 and First Trust.
Diversification Opportunities for WisdomTree 9060 and First Trust
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WisdomTree and First is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree 9060 Balanced and First Trust Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Large and WisdomTree 9060 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 9060 Balanced 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 Large has no effect on the direction of WisdomTree 9060 i.e., WisdomTree 9060 and First Trust go up and down completely randomly.
Pair Corralation between WisdomTree 9060 and First Trust
Given the investment horizon of 90 days WisdomTree 9060 is expected to generate 1.42 times less return on investment than First Trust. But when comparing it to its historical volatility, WisdomTree 9060 Balanced is 1.03 times less risky than First Trust. It trades about 0.14 of its potential returns per unit of risk. First Trust Large is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 8,489 in First Trust Large on September 30, 2025 and sell it today you would earn a total of 191.00 from holding First Trust Large or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree 9060 Balanced vs. First Trust Large
Performance |
| Timeline |
| WisdomTree 9060 Balanced |
| First Trust Large |
WisdomTree 9060 and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree 9060 and First Trust
The main advantage of trading using opposite WisdomTree 9060 and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree 9060 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 9060 vs. Pacer Funds Trust | WisdomTree 9060 vs. WisdomTree Earnings 500 | WisdomTree 9060 vs. Goldman Sachs MarketBeta | WisdomTree 9060 vs. Vanguard Russell 2000 |
| First Trust vs. First Trust Mid | First Trust vs. First Trust Large | First Trust vs. First Trust Large | First Trust vs. First Trust Small |
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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