Correlation Between Cambria Value and Fidelity Dynamic

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

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

Diversification Opportunities for Cambria Value and Fidelity Dynamic

0.6

Correlation Coefficient

Cambria Value  Fidelity Dynamic

Poor diversification

The 3 months correlation between Cambria and Fidelity is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Cambria Value and and Fidelity Dynamic Buffered in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Dynamic Buffered and Cambria Value 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 Value and are associated (or correlated) with Fidelity Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Dynamic Buffered has no effect on the direction of Cambria Value i.e., Cambria Value and Fidelity Dynamic go up and down completely randomly.

Pair Corralation between Cambria Value and Fidelity Dynamic

Given the investment horizon of 90 days Cambria Value and is expected to under-perform the Fidelity Dynamic. In addition to that, Cambria Value is 1.12 times more volatile than Fidelity Dynamic Buffered. It trades about -0.26 of its total potential returns per unit of risk. Fidelity Dynamic Buffered is currently generating about -0.09 per unit of volatility. If you would invest  2,784  in Fidelity Dynamic Buffered on October 10, 2024 and sell it today you would lose (35.00) from holding Fidelity Dynamic Buffered or give up 1.26% of portfolio value over 90 days.

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

Cambria Value and  vs.  Fidelity Dynamic Buffered

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.

Fidelity Dynamic Buffered

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Dynamic Buffered are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Fidelity Dynamic is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Cambria Value and Fidelity Dynamic

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

The idea behind Cambria Value and and Fidelity Dynamic Buffered 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.