Correlation Between Quadratic Interest and Cambria Value

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

By analyzing existing cross correlation between Quadratic Interest Rate and Cambria Value and, you can compare the effects of market volatilities on Quadratic Interest and Cambria Value 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 Quadratic Interest with a short position of Cambria Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quadratic Interest and Cambria Value.

Diversification Opportunities for Quadratic Interest and Cambria Value

-0.81

Correlation Coefficient

Quadratic Interest  Cambria Value

Pay attention - limited upside

The 3 months correlation between Quadratic and Cambria is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Quadratic Interest Rate and Cambria Value and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Value and Quadratic Interest 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 Quadratic Interest Rate are associated (or correlated) with Cambria Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Value has no effect on the direction of Quadratic Interest i.e., Quadratic Interest and Cambria Value go up and down completely randomly.

Pair Corralation between Quadratic Interest and Cambria Value

Given the investment horizon of 90 days Quadratic Interest Rate is expected to under-perform the Cambria Value. But the etf apears to be less risky and, when comparing its historical volatility, Quadratic Interest Rate is 1.72 times less risky than Cambria Value. The etf trades about -0.25 of its potential returns per unit of risk. The Cambria Value and is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,971  in Cambria Value and on September 19, 2024 and sell it today you would earn a total of  60.00  from holding Cambria Value and or generate 2.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Quadratic Interest Rate  vs.  Cambria Value and

Quadratic Interest Rate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quadratic Interest Rate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the ETF venture institutional investors.

Cambria Value

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cambria Value and are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Cambria Value is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Quadratic Interest and Cambria Value

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

The idea behind Quadratic Interest Rate and Cambria Value and 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.