Correlation Between Cambria Shareholder and Cambria Global

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

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

Diversification Opportunities for Cambria Shareholder and Cambria Global

-0.74

Correlation Coefficient

Cambria Shareholder  Cambria Global

Pay attention - limited upside

The 3 months correlation between Cambria and Cambria is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Cambria Shareholder Yield and Cambria Global Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Global Value and Cambria Shareholder 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 Shareholder Yield are associated (or correlated) with Cambria Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Global Value has no effect on the direction of Cambria Shareholder i.e., Cambria Shareholder and Cambria Global go up and down completely randomly.

Pair Corralation between Cambria Shareholder and Cambria Global

Given the investment horizon of 90 days Cambria Shareholder Yield is expected to under-perform the Cambria Global. But the etf apears to be less risky and, when comparing its historical volatility, Cambria Shareholder Yield is 2.07 times less risky than Cambria Global. The etf trades about -0.09 of its potential returns per unit of risk. The Cambria Global Value is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2,091  in Cambria Global Value on December 28, 2024 and sell it today you would earn a total of  395.00  from holding Cambria Global Value or generate 18.89% return on investment over 90 days.

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

Cambria Shareholder Yield  vs.  Cambria Global Value

Cambria Shareholder Yield

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cambria Shareholder Yield has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Cambria Shareholder is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Cambria Global Value

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cambria Global Value are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Cambria Global disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cambria Shareholder and Cambria Global

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

The idea behind Cambria Shareholder Yield and Cambria Global Value 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.