Correlation Between WBI BullBear and AdvisorShares STAR
Can any of the company-specific risk be diversified away by investing in both WBI BullBear and AdvisorShares STAR 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 AdvisorShares STAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WBI BullBear Quality and AdvisorShares STAR Global, you can compare the effects of market volatilities on WBI BullBear and AdvisorShares STAR 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 AdvisorShares STAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of WBI BullBear and AdvisorShares STAR.
Diversification Opportunities for WBI BullBear and AdvisorShares STAR
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WBI and AdvisorShares is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding WBI BullBear Quality and AdvisorShares STAR Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AdvisorShares STAR Global 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 Quality are associated (or correlated) with AdvisorShares STAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AdvisorShares STAR Global has no effect on the direction of WBI BullBear i.e., WBI BullBear and AdvisorShares STAR go up and down completely randomly.
Pair Corralation between WBI BullBear and AdvisorShares STAR
Given the investment horizon of 90 days WBI BullBear Quality is expected to generate 1.31 times more return on investment than AdvisorShares STAR. However, WBI BullBear is 1.31 times more volatile than AdvisorShares STAR Global. It trades about 0.26 of its potential returns per unit of risk. AdvisorShares STAR Global is currently generating about 0.13 per unit of risk. If you would invest 3,531 in WBI BullBear Quality on August 30, 2024 and sell it today you would earn a total of 160.00 from holding WBI BullBear Quality or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WBI BullBear Quality vs. AdvisorShares STAR Global
Performance |
| Timeline |
| WBI BullBear Quality |
| AdvisorShares STAR Global |
WBI BullBear and AdvisorShares STAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WBI BullBear and AdvisorShares STAR
The main advantage of trading using opposite WBI BullBear and AdvisorShares STAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WBI BullBear position performs unexpectedly, AdvisorShares STAR 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 AdvisorShares STAR will offset losses from the drop in AdvisorShares STAR's long position.| WBI BullBear vs. FT Vest Equity | WBI BullBear vs. Northern Lights | WBI BullBear vs. Dimensional International High | WBI BullBear vs. First Trust Exchange Traded |
| AdvisorShares STAR vs. Vident Core Bond | AdvisorShares STAR vs. WBI BullBear Quality | AdvisorShares STAR vs. WBI BullBear Value |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |