Correlation Between Cambiar International and 70082LAB3

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

-0.79

Correlation Coefficient

Cambiar International  70082LAB3

Pay attention - limited upside

The 3 months correlation between Cambiar and 70082LAB3 is -0.79. 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 Equity is expected to under-perform the 70082LAB3. But the mutual fund apears to be less risky and, when comparing its historical volatility, Cambiar International Equity is 1.74 times less risky than 70082LAB3. The mutual fund trades about -0.04 of its potential returns per unit of risk. The US70082LAB36 is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  8,428  in US70082LAB36 on September 7, 2024 and sell it today you would earn a total of  544.00  from holding US70082LAB36 or generate 6.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	61.9%
Values	Daily Returns

Cambiar International Equity  vs.  US70082LAB36

Cambiar International

Risk-Adjusted Performance

0 of 100

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

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in US70082LAB36 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, 70082LAB3 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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.

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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.