Correlation Between IShares Core and Cambria Global
Can any of the company-specific risk be diversified away by investing in both IShares Core 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 IShares Core and Cambria Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core Aggressive and Cambria Global Momentum, you can compare the effects of market volatilities on IShares Core 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 IShares Core with a short position of Cambria Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Cambria Global.
Diversification Opportunities for IShares Core and Cambria Global
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Cambria is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core Aggressive and Cambria Global Momentum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Global Momentum and IShares Core 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 iShares Core Aggressive 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 Momentum has no effect on the direction of IShares Core i.e., IShares Core and Cambria Global go up and down completely randomly.
Pair Corralation between IShares Core and Cambria Global
Considering the 90-day investment horizon IShares Core is expected to generate 2.57 times less return on investment than Cambria Global. But when comparing it to its historical volatility, iShares Core Aggressive is 1.61 times less risky than Cambria Global. It trades about 0.07 of its potential returns per unit of risk. Cambria Global Momentum is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,967 in Cambria Global Momentum on August 27, 2024 and sell it today you would earn a total of 60.00 from holding Cambria Global Momentum or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core Aggressive vs. Cambria Global Momentum
Performance |
| Timeline |
| iShares Core Aggressive |
| Cambria Global Momentum |
IShares Core and Cambria Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Cambria Global
The main advantage of trading using opposite IShares Core and Cambria Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core 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.| IShares Core vs. iShares Core Growth | IShares Core vs. iShares Core Moderate | IShares Core vs. iShares Core Conservative | IShares Core vs. iShares Core Total |
| Cambria Global vs. Argent Mid Cap | Cambria Global vs. Calumet Specialty Products | Cambria Global vs. Loop Industries | Cambria Global vs. Hurco Companies |
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 Stocks Directory module to find actively traded stocks across global markets.
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