Correlation Between WBI BullBear and KFA Value
Can any of the company-specific risk be diversified away by investing in both WBI BullBear and KFA Value 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 KFA Value 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 KFA Value Line, you can compare the effects of market volatilities on WBI BullBear and KFA Value 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 KFA Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of WBI BullBear and KFA Value.
Diversification Opportunities for WBI BullBear and KFA Value
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WBI and KFA is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding WBI BullBear Value and KFA Value Line in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KFA Value Line 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 KFA Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KFA Value Line has no effect on the direction of WBI BullBear i.e., WBI BullBear and KFA Value go up and down completely randomly.
Pair Corralation between WBI BullBear and KFA Value
Given the investment horizon of 90 days WBI BullBear Value is expected to generate 1.35 times more return on investment than KFA Value. However, WBI BullBear is 1.35 times more volatile than KFA Value Line. It trades about 0.11 of its potential returns per unit of risk. KFA Value Line is currently generating about 0.09 per unit of risk. If you would invest 2,969 in WBI BullBear Value on August 15, 2025 and sell it today you would earn a total of 160.00 from holding WBI BullBear Value or generate 5.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WBI BullBear Value vs. KFA Value Line
Performance |
| Timeline |
| WBI BullBear Value |
| KFA Value Line |
WBI BullBear and KFA Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WBI BullBear and KFA Value
The main advantage of trading using opposite WBI BullBear and KFA Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WBI BullBear position performs unexpectedly, KFA Value 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 KFA Value will offset losses from the drop in KFA Value's long position.| WBI BullBear vs. WBI BullBear Yield | WBI BullBear vs. WBI BullBear Quality | WBI BullBear vs. JP Morgan Exchange Traded | WBI BullBear vs. First Trust SMID |
| KFA Value vs. Nushares ETF Trust | KFA Value vs. ProShares Ultra SmallCap600 | KFA Value vs. iShares MSCI Finland | KFA Value vs. Global X SP |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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