Correlation Between WBI BullBear and EA Series
Can any of the company-specific risk be diversified away by investing in both WBI BullBear and EA Series 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 WBI BullBear and EA Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WBI BullBear Value and EA Series Trust, you can compare the effects of market volatilities on WBI BullBear and EA Series 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 WBI BullBear with a short position of EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of WBI BullBear and EA Series.
Diversification Opportunities for WBI BullBear and EA Series
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WBI and MDLV is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding WBI BullBear Value and EA Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Series Trust and WBI BullBear 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 WBI BullBear Value are associated (or correlated) with EA Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Series Trust has no effect on the direction of WBI BullBear i.e., WBI BullBear and EA Series go up and down completely randomly.
Pair Corralation between WBI BullBear and EA Series
Given the investment horizon of 90 days WBI BullBear is expected to generate 1.7 times less return on investment than EA Series. In addition to that, WBI BullBear is 1.22 times more volatile than EA Series Trust. It trades about 0.03 of its total potential returns per unit of risk. EA Series Trust is currently generating about 0.07 per unit of volatility. If you would invest 2,344 in EA Series Trust on September 3, 2024 and sell it today you would earn a total of 395.00 from holding EA Series Trust or generate 16.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.23% |
| Values | Daily Returns |
WBI BullBear Value vs. EA Series Trust
Performance |
| Timeline |
| WBI BullBear Value |
| EA Series Trust |
WBI BullBear and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WBI BullBear and EA Series
The main advantage of trading using opposite WBI BullBear and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WBI BullBear position performs unexpectedly, EA Series 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 EA Series will offset losses from the drop in EA Series' long position.| WBI BullBear vs. FT Vest Equity | WBI BullBear vs. Northern Lights | WBI BullBear vs. Dimensional International High | WBI BullBear vs. JPMorgan Fundamental Data |
| EA Series vs. FT Vest Equity | EA Series vs. Northern Lights | EA Series vs. Dimensional International High | EA Series vs. JPMorgan Fundamental Data |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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