Correlation Between WisdomTree Managed and First Trust
Can any of the company-specific risk be diversified away by investing in both WisdomTree Managed 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 Managed 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 Managed Futures and First Trust Income, you can compare the effects of market volatilities on WisdomTree Managed 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 Managed with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Managed and First Trust.
Diversification Opportunities for WisdomTree Managed and First Trust
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WisdomTree and First is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Managed Futures and First Trust Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Income and WisdomTree Managed 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 Managed Futures 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 Income has no effect on the direction of WisdomTree Managed i.e., WisdomTree Managed and First Trust go up and down completely randomly.
Pair Corralation between WisdomTree Managed and First Trust
Given the investment horizon of 90 days WisdomTree Managed is expected to generate 1.4 times less return on investment than First Trust. In addition to that, WisdomTree Managed is 2.07 times more volatile than First Trust Income. It trades about 0.09 of its total potential returns per unit of risk. First Trust Income is currently generating about 0.27 per unit of volatility. If you would invest 2,249 in First Trust Income on December 2, 2025 and sell it today you would earn a total of 132.99 from holding First Trust Income or generate 5.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.39% |
| Values | Daily Returns |
WisdomTree Managed Futures vs. First Trust Income
Performance |
| Timeline |
| WisdomTree Managed |
| First Trust Income |
WisdomTree Managed and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Managed and First Trust
The main advantage of trading using opposite WisdomTree Managed and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Managed 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 Managed vs. Elevation Series Trust | WisdomTree Managed vs. Exchange Traded Concepts | WisdomTree Managed vs. Innovator MSCI EAFE | WisdomTree Managed vs. VanEck Inflation Allocation |
| First Trust vs. Rareview Dynamic Fixed | First Trust vs. WisdomTree Alternative Income | First Trust vs. WisdomTree Target Range | First Trust vs. First Trust Exchange Traded |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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