Correlation Between IShares Core and WBI BullBear
Can any of the company-specific risk be diversified away by investing in both IShares Core 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 IShares Core and WBI BullBear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SP and WBI BullBear Quality, you can compare the effects of market volatilities on IShares Core 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 IShares Core with a short position of WBI BullBear. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and WBI BullBear.
Diversification Opportunities for IShares Core and WBI BullBear
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and WBI is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and WBI BullBear Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WBI BullBear Quality and IShares Core 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 iShares Core SP 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 Quality has no effect on the direction of IShares Core i.e., IShares Core and WBI BullBear go up and down completely randomly.
Pair Corralation between IShares Core and WBI BullBear
Considering the 90-day investment horizon iShares Core SP is expected to generate 0.96 times more return on investment than WBI BullBear. However, iShares Core SP is 1.04 times less risky than WBI BullBear. It trades about 0.38 of its potential returns per unit of risk. WBI BullBear Quality is currently generating about 0.33 per unit of risk. If you would invest 57,124 in iShares Core SP on September 1, 2024 and sell it today you would earn a total of 3,383 from holding iShares Core SP or generate 5.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
iShares Core SP vs. WBI BullBear Quality
Performance |
| Timeline |
| iShares Core SP |
| WBI BullBear Quality |
IShares Core and WBI BullBear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and WBI BullBear
The main advantage of trading using opposite IShares Core and WBI BullBear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core 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.| IShares Core vs. iShares Core SP | IShares Core vs. iShares Core SP | IShares Core vs. iShares SP 500 | IShares Core vs. iShares Russell 2000 |
| WBI BullBear vs. FT Vest Equity | WBI BullBear vs. Northern Lights | WBI BullBear vs. Dimensional International High | WBI BullBear vs. Matthews China Discovery |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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