Correlation Between First Trust and WisdomTree Continuous
Can any of the company-specific risk be diversified away by investing in both First Trust and WisdomTree Continuous 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 Continuous into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust RiverFront and WisdomTree Continuous Commodity, you can compare the effects of market volatilities on First Trust and WisdomTree Continuous 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 Continuous. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and WisdomTree Continuous.
Diversification Opportunities for First Trust and WisdomTree Continuous
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and WisdomTree is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding First Trust RiverFront and WisdomTree Continuous Commodit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Continuous 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 RiverFront are associated (or correlated) with WisdomTree Continuous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Continuous has no effect on the direction of First Trust i.e., First Trust and WisdomTree Continuous go up and down completely randomly.
Pair Corralation between First Trust and WisdomTree Continuous
Given the investment horizon of 90 days First Trust RiverFront is expected to generate 1.24 times more return on investment than WisdomTree Continuous. However, First Trust is 1.24 times more volatile than WisdomTree Continuous Commodity. It trades about 0.12 of its potential returns per unit of risk. WisdomTree Continuous Commodity is currently generating about 0.1 per unit of risk. If you would invest 6,120 in First Trust RiverFront on October 18, 2025 and sell it today you would earn a total of 2,153 from holding First Trust RiverFront or generate 35.18% 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 RiverFront vs. WisdomTree Continuous Commodit
Performance |
| Timeline |
| First Trust RiverFront |
| WisdomTree Continuous |
First Trust and WisdomTree Continuous Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and WisdomTree Continuous
The main advantage of trading using opposite First Trust and WisdomTree Continuous positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, WisdomTree Continuous 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 Continuous will offset losses from the drop in WisdomTree Continuous' long position.| First Trust vs. Avantis International Small | First Trust vs. Goldman Sachs MarketBeta | First Trust vs. WisdomTree Emerging Markets | First Trust vs. WisdomTree Emerging Markets |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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