Correlation Between Aptus Drawdown and Cambria Tail
Can any of the company-specific risk be diversified away by investing in both Aptus Drawdown and Cambria Tail 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 Aptus Drawdown and Cambria Tail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aptus Drawdown Managed and Cambria Tail Risk, you can compare the effects of market volatilities on Aptus Drawdown and Cambria Tail 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 Aptus Drawdown with a short position of Cambria Tail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aptus Drawdown and Cambria Tail.
Diversification Opportunities for Aptus Drawdown and Cambria Tail
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aptus and Cambria is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Aptus Drawdown Managed and Cambria Tail Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Tail Risk and Aptus Drawdown 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 Aptus Drawdown Managed are associated (or correlated) with Cambria Tail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Tail Risk has no effect on the direction of Aptus Drawdown i.e., Aptus Drawdown and Cambria Tail go up and down completely randomly.
Pair Corralation between Aptus Drawdown and Cambria Tail
Given the investment horizon of 90 days Aptus Drawdown Managed is expected to under-perform the Cambria Tail. But the etf apears to be less risky and, when comparing its historical volatility, Aptus Drawdown Managed is 1.06 times less risky than Cambria Tail. The etf trades about -0.07 of its potential returns per unit of risk. The Cambria Tail Risk is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,107 in Cambria Tail Risk on December 27, 2024 and sell it today you would earn a total of 40.00 from holding Cambria Tail Risk or generate 3.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Aptus Drawdown Managed vs. Cambria Tail Risk
Performance |
Timeline |
Aptus Drawdown Managed |
Cambria Tail Risk |
Aptus Drawdown and Cambria Tail Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aptus Drawdown and Cambria Tail
The main advantage of trading using opposite Aptus Drawdown and Cambria Tail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aptus Drawdown position performs unexpectedly, Cambria Tail 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 Cambria Tail will offset losses from the drop in Cambria Tail's long position.Aptus Drawdown vs. Aptus Collared Income | Aptus Drawdown vs. Aptus Defined Risk | Aptus Drawdown vs. Anfield Equity Sector | Aptus Drawdown vs. Opus Small Cap |
Cambria Tail vs. Amplify BlackSwan Growth | Cambria Tail vs. AGFiQ Market Neutral | Cambria Tail vs. Quadratic Interest Rate | Cambria Tail vs. AdvisorShares Dorsey Wright |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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