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 Short, 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
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WisdomTree and First is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Managed Futures and First Trust Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Short 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 Short 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 Futures is expected to generate 9.56 times more return on investment than First Trust. However, WisdomTree Managed is 9.56 times more volatile than First Trust Short. It trades about 0.06 of its potential returns per unit of risk. First Trust Short is currently generating about 0.32 per unit of risk. If you would invest 3,754 in WisdomTree Managed Futures on November 9, 2025 and sell it today you would earn a total of 95.00 from holding WisdomTree Managed Futures or generate 2.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Managed Futures vs. First Trust Short
Performance |
| Timeline |
| WisdomTree Managed |
| First Trust Short |
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. American Century Diversified | First Trust vs. Columbia Multi Sector Municipal | First Trust vs. Dimensional ETF Trust | First Trust vs. Sterling Capital Enhanced |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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