Correlation Between WBI Power and Invesco SP
Can any of the company-specific risk be diversified away by investing in both WBI Power and Invesco SP 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 Invesco SP 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 Invesco SP 500, you can compare the effects of market volatilities on WBI Power and Invesco SP 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 Invesco SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of WBI Power and Invesco SP.
Diversification Opportunities for WBI Power and Invesco SP
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WBI and Invesco is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding WBI Power Factor and Invesco SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco SP 500 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 Invesco SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco SP 500 has no effect on the direction of WBI Power i.e., WBI Power and Invesco SP go up and down completely randomly.
Pair Corralation between WBI Power and Invesco SP
Given the investment horizon of 90 days WBI Power Factor is expected to generate 1.19 times more return on investment than Invesco SP. However, WBI Power is 1.19 times more volatile than Invesco SP 500. It trades about -0.09 of its potential returns per unit of risk. Invesco SP 500 is currently generating about -0.17 per unit of risk. If you would invest 3,163 in WBI Power Factor on September 16, 2024 and sell it today you would lose (44.00) from holding WBI Power Factor or give up 1.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WBI Power Factor vs. Invesco SP 500
Performance |
| Timeline |
| WBI Power Factor |
| Invesco SP 500 |
WBI Power and Invesco SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WBI Power and Invesco SP
The main advantage of trading using opposite WBI Power and Invesco SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WBI Power position performs unexpectedly, Invesco SP 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 Invesco SP will offset losses from the drop in Invesco SP's long position.| WBI Power vs. SPDR Portfolio Aggregate | WBI Power vs. Global X MSCI | WBI Power vs. HUMANA INC | WBI Power vs. Barloworld Ltd ADR |
| Invesco SP vs. SPDR Portfolio Aggregate | Invesco SP vs. WBI Power Factor | Invesco SP vs. Global X MSCI | Invesco SP 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |