Correlation Between WisdomTree Alternative and First Trust
Can any of the company-specific risk be diversified away by investing in both WisdomTree Alternative 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 Alternative 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 Alternative Income and First Trust TCW, you can compare the effects of market volatilities on WisdomTree Alternative 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 Alternative with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Alternative and First Trust.
Diversification Opportunities for WisdomTree Alternative and First Trust
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WisdomTree and First is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Alternative Income and First Trust TCW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust TCW and WisdomTree Alternative 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 Alternative Income 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 TCW has no effect on the direction of WisdomTree Alternative i.e., WisdomTree Alternative and First Trust go up and down completely randomly.
Pair Corralation between WisdomTree Alternative and First Trust
Given the investment horizon of 90 days WisdomTree Alternative Income is expected to under-perform the First Trust. In addition to that, WisdomTree Alternative is 4.09 times more volatile than First Trust TCW. It trades about -0.09 of its total potential returns per unit of risk. First Trust TCW is currently generating about 0.22 per unit of volatility. If you would invest 2,464 in First Trust TCW on August 16, 2025 and sell it today you would earn a total of 57.00 from holding First Trust TCW or generate 2.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Alternative Income vs. First Trust TCW
Performance |
| Timeline |
| WisdomTree Alternative |
| First Trust TCW |
WisdomTree Alternative and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Alternative and First Trust
The main advantage of trading using opposite WisdomTree Alternative and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Alternative 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 Alternative vs. Rareview Dynamic Fixed | WisdomTree Alternative vs. First Trust Income | WisdomTree Alternative vs. First Trust Exchange Traded | WisdomTree Alternative vs. Virtus Private Credit |
| First Trust vs. SPDR SP 600 | First Trust vs. iShares Healthcare ETF | First Trust vs. iShares Infrastructure ETF | First Trust vs. iShares Russell Top |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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