Correlation Between WisdomTree and First Trust
Can any of the company-specific risk be diversified away by investing in both WisdomTree 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 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 and First Trust, you can compare the effects of market volatilities on WisdomTree 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 with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree and First Trust.
Diversification Opportunities for WisdomTree and First Trust
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WisdomTree and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree and First Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust and WisdomTree 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 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 has no effect on the direction of WisdomTree i.e., WisdomTree and First Trust go up and down completely randomly.
Pair Corralation between WisdomTree and First Trust
If you would invest (100.00) in First Trust on November 4, 2025 and sell it today you would earn a total of 100.00 from holding First Trust or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree vs. First Trust
Performance |
| Timeline |
| WisdomTree |
Risk-Adjusted Performance
Weakest
Weak | Strong |
| First Trust |
Risk-Adjusted Performance
Weakest
Weak | Strong |
WisdomTree and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree and First Trust
The main advantage of trading using opposite WisdomTree and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree 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 vs. Alpha Architect Value | WisdomTree vs. First Trust Dividend | WisdomTree vs. Collaborative Investment Series | WisdomTree vs. Harbor ETF Trust |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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