Correlation Between Wahed Dow and First Trust
Can any of the company-specific risk be diversified away by investing in both Wahed Dow 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 Wahed Dow and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wahed Dow Jones and First Trust Exchange Traded, you can compare the effects of market volatilities on Wahed Dow 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 Wahed Dow with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wahed Dow and First Trust.
Diversification Opportunities for Wahed Dow and First Trust
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Wahed and First is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Wahed Dow Jones and First Trust Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Exchange and Wahed Dow 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 Wahed Dow Jones 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 Exchange has no effect on the direction of Wahed Dow i.e., Wahed Dow and First Trust go up and down completely randomly.
Pair Corralation between Wahed Dow and First Trust
Given the investment horizon of 90 days Wahed Dow is expected to generate 1.09 times less return on investment than First Trust. But when comparing it to its historical volatility, Wahed Dow Jones is 1.35 times less risky than First Trust. It trades about 0.17 of its potential returns per unit of risk. First Trust Exchange Traded is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 3,038 in First Trust Exchange Traded on August 15, 2025 and sell it today you would earn a total of 330.00 from holding First Trust Exchange Traded or generate 10.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wahed Dow Jones vs. First Trust Exchange Traded
Performance |
| Timeline |
| Wahed Dow Jones |
| First Trust Exchange |
Wahed Dow and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wahed Dow and First Trust
The main advantage of trading using opposite Wahed Dow and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wahed Dow 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.| Wahed Dow vs. VictoryShares International Free | Wahed Dow vs. Amplify Online Retail | Wahed Dow vs. ETF Series Solutions | Wahed Dow vs. Series Portfolios Trust |
| First Trust vs. EGSHARES BLUE CHIP | First Trust vs. Soundwatch Hedged Equity | First Trust vs. iShares Nasdaq Top | First Trust vs. OShares Global Internet |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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