Correlation Between Dimensional International and WBI BullBear
Can any of the company-specific risk be diversified away by investing in both Dimensional International and WBI BullBear 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 Dimensional International and WBI BullBear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dimensional International High and WBI BullBear Value, you can compare the effects of market volatilities on Dimensional International and WBI BullBear 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 Dimensional International with a short position of WBI BullBear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional International and WBI BullBear.
Diversification Opportunities for Dimensional International and WBI BullBear
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dimensional and WBI is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional International High and WBI BullBear Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WBI BullBear Value and Dimensional International 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 Dimensional International High are associated (or correlated) with WBI BullBear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WBI BullBear Value has no effect on the direction of Dimensional International i.e., Dimensional International and WBI BullBear go up and down completely randomly.
Pair Corralation between Dimensional International and WBI BullBear
Given the investment horizon of 90 days Dimensional International High is expected to generate 1.12 times more return on investment than WBI BullBear. However, Dimensional International is 1.12 times more volatile than WBI BullBear Value. It trades about 0.05 of its potential returns per unit of risk. WBI BullBear Value is currently generating about 0.05 per unit of risk. If you would invest 2,317 in Dimensional International High on November 28, 2024 and sell it today you would earn a total of 415.50 from holding Dimensional International High or generate 17.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Dimensional International High vs. WBI BullBear Value
Performance |
| Timeline |
| Dimensional International |
| WBI BullBear Value |
Dimensional International and WBI BullBear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dimensional International and WBI BullBear
The main advantage of trading using opposite Dimensional International and WBI BullBear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional International position performs unexpectedly, WBI BullBear 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 WBI BullBear will offset losses from the drop in WBI BullBear's long position.The idea behind Dimensional International High and WBI BullBear Value pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| WBI BullBear vs. FT Vest Equity | WBI BullBear vs. Northern Lights | WBI BullBear vs. Dimensional International High | WBI BullBear vs. First Trust Exchange Traded |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |