Correlation Between Cambiar International and 70082LAB3

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Cambiar International and 70082LAB3 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 Cambiar International and 70082LAB3 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambiar International Equity and US70082LAB36, you can compare the effects of market volatilities on Cambiar International and 70082LAB3 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 Cambiar International with a short position of 70082LAB3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambiar International and 70082LAB3.

Diversification Opportunities for Cambiar International and 70082LAB3

-0.78
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Cambiar and 70082LAB3 is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Cambiar International Equity and US70082LAB36 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US70082LAB36 and Cambiar International 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 Cambiar International Equity are associated (or correlated) with 70082LAB3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US70082LAB36 has no effect on the direction of Cambiar International i.e., Cambiar International and 70082LAB3 go up and down completely randomly.

Pair Corralation between Cambiar International and 70082LAB3

Assuming the 90 days horizon Cambiar International is expected to generate 2.16 times less return on investment than 70082LAB3. But when comparing it to its historical volatility, Cambiar International Equity is 2.56 times less risky than 70082LAB3. It trades about 0.08 of its potential returns per unit of risk. US70082LAB36 is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  7,850  in US70082LAB36 on September 5, 2024 and sell it today you would earn a total of  1,122  from holding US70082LAB36 or generate 14.29% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy50.81%
ValuesDaily Returns

Cambiar International Equity  vs.  US70082LAB36

 Performance 
       Timeline  
Cambiar International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Cambiar International Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Cambiar International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
US70082LAB36 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in US70082LAB36 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 70082LAB3 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Cambiar International and 70082LAB3 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cambiar International and 70082LAB3

The main advantage of trading using opposite Cambiar International and 70082LAB3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambiar International position performs unexpectedly, 70082LAB3 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 70082LAB3 will offset losses from the drop in 70082LAB3's long position.
The idea behind Cambiar International Equity and US70082LAB36 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.
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

Other Complementary Tools

Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Investing Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk