Correlation Between Cambiar Smid and Cambiar Small
Can any of the company-specific risk be diversified away by investing in both Cambiar Smid and Cambiar Small 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 Smid and Cambiar Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambiar Smid Fund and Cambiar Small Cap, you can compare the effects of market volatilities on Cambiar Smid and Cambiar Small 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 Smid with a short position of Cambiar Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambiar Smid and Cambiar Small.
Diversification Opportunities for Cambiar Smid and Cambiar Small
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cambiar and Cambiar is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Cambiar Smid Fund and Cambiar Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambiar Small Cap and Cambiar Smid 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 Smid Fund are associated (or correlated) with Cambiar Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambiar Small Cap has no effect on the direction of Cambiar Smid i.e., Cambiar Smid and Cambiar Small go up and down completely randomly.
Pair Corralation between Cambiar Smid and Cambiar Small
Assuming the 90 days horizon Cambiar Smid Fund is expected to generate 0.95 times more return on investment than Cambiar Small. However, Cambiar Smid Fund is 1.05 times less risky than Cambiar Small. It trades about 0.0 of its potential returns per unit of risk. Cambiar Small Cap is currently generating about -0.09 per unit of risk. If you would invest 2,232 in Cambiar Smid Fund on December 29, 2024 and sell it today you would lose (7.00) from holding Cambiar Smid Fund or give up 0.31% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Cambiar Smid Fund vs. Cambiar Small Cap
Performance |
Timeline |
Cambiar Smid |
Cambiar Small Cap |
Cambiar Smid and Cambiar Small Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cambiar Smid and Cambiar Small
The main advantage of trading using opposite Cambiar Smid and Cambiar Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambiar Smid position performs unexpectedly, Cambiar Small 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 Cambiar Small will offset losses from the drop in Cambiar Small's long position.Cambiar Smid vs. Alphacentric Lifesci Healthcare | Cambiar Smid vs. Putnam Global Health | Cambiar Smid vs. The Hartford Healthcare | Cambiar Smid vs. Blackrock Health Sciences |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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