Correlation Between FT Vest and WisdomTree SmallCap
Can any of the company-specific risk be diversified away by investing in both FT Vest and WisdomTree SmallCap 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 FT Vest and WisdomTree SmallCap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FT Vest Equity and WisdomTree SmallCap Dividend, you can compare the effects of market volatilities on FT Vest and WisdomTree SmallCap 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 FT Vest with a short position of WisdomTree SmallCap. Check out your portfolio center. Please also check ongoing floating volatility patterns of FT Vest and WisdomTree SmallCap.
Diversification Opportunities for FT Vest and WisdomTree SmallCap
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DHDG and WisdomTree is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding FT Vest Equity and WisdomTree SmallCap Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree SmallCap and FT Vest 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 FT Vest Equity are associated (or correlated) with WisdomTree SmallCap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree SmallCap has no effect on the direction of FT Vest i.e., FT Vest and WisdomTree SmallCap go up and down completely randomly.
Pair Corralation between FT Vest and WisdomTree SmallCap
Given the investment horizon of 90 days FT Vest is expected to generate 7.76 times less return on investment than WisdomTree SmallCap. But when comparing it to its historical volatility, FT Vest Equity is 2.44 times less risky than WisdomTree SmallCap. It trades about 0.04 of its potential returns per unit of risk. WisdomTree SmallCap Dividend is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,268 in WisdomTree SmallCap Dividend on September 4, 2025 and sell it today you would earn a total of 85.00 from holding WisdomTree SmallCap Dividend or generate 2.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FT Vest Equity vs. WisdomTree SmallCap Dividend
Performance |
| Timeline |
| FT Vest Equity |
| WisdomTree SmallCap |
FT Vest and WisdomTree SmallCap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FT Vest and WisdomTree SmallCap
The main advantage of trading using opposite FT Vest and WisdomTree SmallCap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FT Vest position performs unexpectedly, WisdomTree SmallCap 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 SmallCap will offset losses from the drop in WisdomTree SmallCap's long position.| FT Vest vs. First Trust Cboe | FT Vest vs. FT Cboe Vest | FT Vest vs. Innovator SP 500 | FT Vest vs. Innovator SP 500 |
| WisdomTree SmallCap vs. FT Vest Equity | WisdomTree SmallCap vs. Northern Lights | WisdomTree SmallCap vs. Diamond Hill Funds | WisdomTree SmallCap vs. Dimensional International High |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |