Correlation Between Cambria Global and Harbor ETF

Can any of the company-specific risk be diversified away by investing in both Cambria Global and Harbor ETF 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 Global and Harbor ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cambria Global Asset and Harbor ETF Trust, you can compare the effects of market volatilities on Cambria Global and Harbor ETF 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 Global with a short position of Harbor ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambria Global and Harbor ETF.

Diversification Opportunities for Cambria Global and Harbor ETF

0.76

Correlation Coefficient

Cambria Global  Harbor ETF

Poor diversification

The 3 months correlation between Cambria and Harbor is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Cambria Global Asset and Harbor ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor ETF Trust and Cambria Global 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 Global Asset are associated (or correlated) with Harbor ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor ETF Trust has no effect on the direction of Cambria Global i.e., Cambria Global and Harbor ETF go up and down completely randomly.

Pair Corralation between Cambria Global and Harbor ETF

Considering the 90-day investment horizon Cambria Global is expected to generate 2.08 times less return on investment than Harbor ETF. In addition to that, Cambria Global is 1.14 times more volatile than Harbor ETF Trust. It trades about 0.1 of its total potential returns per unit of risk. Harbor ETF Trust is currently generating about 0.24 per unit of volatility. If you would invest  2,240  in Harbor ETF Trust on September 6, 2024 and sell it today you would earn a total of  169.00  from holding Harbor ETF Trust or generate 7.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Cambria Global Asset  vs.  Harbor ETF Trust

Cambria Global Asset

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cambria Global Asset are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Cambria Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Harbor ETF Trust

Risk-Adjusted Performance

18 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Harbor ETF Trust are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Harbor ETF may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Cambria Global and Harbor ETF

The main advantage of trading using opposite Cambria Global and Harbor ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambria Global position performs unexpectedly, Harbor ETF 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 Harbor ETF will offset losses from the drop in Harbor ETF's long position.

The idea behind Cambria Global Asset and Harbor ETF Trust 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 Transaction History module to view history of all your transactions and understand their impact on performance.