Correlation Between First Trust and WisdomTree Managed
Can any of the company-specific risk be diversified away by investing in both First Trust and WisdomTree Managed 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 Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Exchange and WisdomTree Managed Futures, you can compare the effects of market volatilities on First Trust and WisdomTree Managed 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 Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and WisdomTree Managed.
Diversification Opportunities for First Trust and WisdomTree Managed
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between First and WisdomTree is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Exchange and WisdomTree Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Managed 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 Exchange are associated (or correlated) with WisdomTree Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Managed has no effect on the direction of First Trust i.e., First Trust and WisdomTree Managed go up and down completely randomly.
Pair Corralation between First Trust and WisdomTree Managed
Given the investment horizon of 90 days First Trust is expected to generate 1.93 times less return on investment than WisdomTree Managed. But when comparing it to its historical volatility, First Trust Exchange is 2.93 times less risky than WisdomTree Managed. It trades about 0.15 of its potential returns per unit of risk. WisdomTree Managed Futures is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,775 in WisdomTree Managed Futures on October 28, 2025 and sell it today you would earn a total of 120.00 from holding WisdomTree Managed Futures or generate 3.18% 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 Exchange vs. WisdomTree Managed Futures
Performance |
| Timeline |
| First Trust Exchange |
| WisdomTree Managed |
First Trust and WisdomTree Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and WisdomTree Managed
The main advantage of trading using opposite First Trust and WisdomTree Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, WisdomTree Managed 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 Managed will offset losses from the drop in WisdomTree Managed's long position.| First Trust vs. Innovator SP 500 | First Trust vs. First Trust Exchange Traded | First Trust vs. FT Cboe Vest | First Trust vs. First Trust Exchange Traded |
| WisdomTree Managed vs. Elevation Series Trust | WisdomTree Managed vs. Exchange Traded Concepts | WisdomTree Managed vs. Innovator MSCI EAFE | WisdomTree Managed vs. VanEck Inflation Allocation |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |