Correlation Between Cambria Emerging and Cambria Foreign
Can any of the company-specific risk be diversified away by investing in both Cambria Emerging and Cambria Foreign 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 Cambria Emerging and Cambria Foreign into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambria Emerging Shareholder and Cambria Foreign Shareholder, you can compare the effects of market volatilities on Cambria Emerging and Cambria Foreign 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 Cambria Emerging with a short position of Cambria Foreign. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambria Emerging and Cambria Foreign.
Diversification Opportunities for Cambria Emerging and Cambria Foreign
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cambria and Cambria is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Cambria Emerging Shareholder and Cambria Foreign Shareholder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Foreign Shar and Cambria Emerging 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 Cambria Emerging Shareholder are associated (or correlated) with Cambria Foreign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Foreign Shar has no effect on the direction of Cambria Emerging i.e., Cambria Emerging and Cambria Foreign go up and down completely randomly.
Pair Corralation between Cambria Emerging and Cambria Foreign
Given the investment horizon of 90 days Cambria Emerging Shareholder is expected to generate 1.26 times more return on investment than Cambria Foreign. However, Cambria Emerging is 1.26 times more volatile than Cambria Foreign Shareholder. It trades about 0.01 of its potential returns per unit of risk. Cambria Foreign Shareholder is currently generating about -0.03 per unit of risk. If you would invest 3,309 in Cambria Emerging Shareholder on September 13, 2024 and sell it today you would earn a total of 16.00 from holding Cambria Emerging Shareholder or generate 0.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Cambria Emerging Shareholder vs. Cambria Foreign Shareholder
Performance |
Timeline |
Cambria Emerging Sha |
Cambria Foreign Shar |
Cambria Emerging and Cambria Foreign Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cambria Emerging and Cambria Foreign
The main advantage of trading using opposite Cambria Emerging and Cambria Foreign positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambria Emerging position performs unexpectedly, Cambria Foreign 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 Foreign will offset losses from the drop in Cambria Foreign's long position.Cambria Emerging vs. Global X MSCI | Cambria Emerging vs. Global X Alternative | Cambria Emerging vs. iShares Emerging Markets | Cambria Emerging vs. Global X SuperDividend |
Cambria Foreign vs. Cambria Shareholder Yield | Cambria Foreign vs. Cambria Emerging Shareholder | Cambria Foreign vs. Cambria Global Value | Cambria Foreign vs. Cambria Global Momentum |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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