Correlation Between WBI Power and Global X
Can any of the company-specific risk be diversified away by investing in both WBI Power and Global X 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 Power and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WBI Power Factor and Global X Adaptive, you can compare the effects of market volatilities on WBI Power and Global X 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 Power with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of WBI Power and Global X.
Diversification Opportunities for WBI Power and Global X
Almost no diversification
The 3 months correlation between WBI and Global is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding WBI Power Factor and Global X Adaptive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Adaptive and WBI Power 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 Power Factor are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Adaptive has no effect on the direction of WBI Power i.e., WBI Power and Global X go up and down completely randomly.
Pair Corralation between WBI Power and Global X
Given the investment horizon of 90 days WBI Power is expected to generate 1.49 times less return on investment than Global X. In addition to that, WBI Power is 1.25 times more volatile than Global X Adaptive. It trades about 0.07 of its total potential returns per unit of risk. Global X Adaptive is currently generating about 0.12 per unit of volatility. If you would invest 3,167 in Global X Adaptive on September 12, 2024 and sell it today you would earn a total of 1,210 from holding Global X Adaptive or generate 38.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WBI Power Factor vs. Global X Adaptive
Performance |
| Timeline |
| WBI Power Factor |
| Global X Adaptive |
WBI Power and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WBI Power and Global X
The main advantage of trading using opposite WBI Power and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WBI Power position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| WBI Power vs. Freedom Day Dividend | WBI Power vs. Franklin Templeton ETF | WBI Power vs. iShares MSCI China | WBI Power vs. Tidal Trust II |
| Global X vs. SPDR Portfolio Aggregate | Global X vs. WBI Power Factor | Global X vs. Global X MSCI | Global X vs. HUMANA INC |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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