Correlation Between First Trust and WisdomTree New
Can any of the company-specific risk be diversified away by investing in both First Trust and WisdomTree New 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 New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Emerging and WisdomTree New Economy, you can compare the effects of market volatilities on First Trust and WisdomTree New 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 New. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and WisdomTree New.
Diversification Opportunities for First Trust and WisdomTree New
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and WisdomTree is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Emerging and WisdomTree New Economy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree New Economy 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 Emerging are associated (or correlated) with WisdomTree New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree New Economy has no effect on the direction of First Trust i.e., First Trust and WisdomTree New go up and down completely randomly.
Pair Corralation between First Trust and WisdomTree New
Given the investment horizon of 90 days First Trust Emerging is expected to generate 0.38 times more return on investment than WisdomTree New. However, First Trust Emerging is 2.62 times less risky than WisdomTree New. It trades about 0.32 of its potential returns per unit of risk. WisdomTree New Economy is currently generating about 0.08 per unit of risk. If you would invest 5,479 in First Trust Emerging on October 10, 2025 and sell it today you would earn a total of 165.00 from holding First Trust Emerging or generate 3.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Emerging vs. WisdomTree New Economy
Performance |
| Timeline |
| First Trust Emerging |
| WisdomTree New Economy |
First Trust and WisdomTree New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and WisdomTree New
The main advantage of trading using opposite First Trust and WisdomTree New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, WisdomTree New 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 New will offset losses from the drop in WisdomTree New's long position.| First Trust vs. Virtus Real Asset | First Trust vs. First Trust Latin | First Trust vs. Managed Portfolio Series | First Trust vs. First Trust Nasdaq |
| WisdomTree New vs. Natixis ETF Trust | WisdomTree New vs. ALPS REIT Dividend | WisdomTree New vs. First Trust Exchange Traded | WisdomTree New vs. SPDR Galaxy Digital |
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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.
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