Correlation Between Global X and WBI BullBear

Can any of the company-specific risk be diversified away by investing in both Global X 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 Global X and WBI BullBear into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global X SuperDividend and WBI BullBear Value, you can compare the effects of market volatilities on Global X 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 Global X with a short position of WBI BullBear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and WBI BullBear.

Diversification Opportunities for Global X and WBI BullBear

0.43

Correlation Coefficient

Global X  WBI BullBear

Very weak diversification

The 3 months correlation between Global and WBI is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Global X SuperDividend and WBI BullBear Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WBI BullBear Value and Global X 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 Global X SuperDividend 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 Value has no effect on the direction of Global X i.e., Global X and WBI BullBear go up and down completely randomly.

Pair Corralation between Global X and WBI BullBear

Given the investment horizon of 90 days Global X SuperDividend is expected to under-perform the WBI BullBear. But the etf apears to be less risky and, when comparing its historical volatility, Global X SuperDividend is 1.09 times less risky than WBI BullBear. The etf trades about -0.08 of its potential returns per unit of risk. The WBI BullBear Value is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,912  in WBI BullBear Value on October 23, 2024 and sell it today you would earn a total of  22.00  from holding WBI BullBear Value or generate 0.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Global X SuperDividend  vs.  WBI BullBear Value

Global X SuperDividend

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global X SuperDividend has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable forward indicators, Global X is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

WBI BullBear Value

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in WBI BullBear Value are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward indicators, WBI BullBear is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Global X and WBI BullBear

The main advantage of trading using opposite Global X and WBI BullBear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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.

The idea behind Global X SuperDividend and WBI BullBear Value pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.