Correlation Between Cambiar Opportunity and Cambiar Smid
Can any of the company-specific risk be diversified away by investing in both Cambiar Opportunity and Cambiar Smid 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 Cambiar Opportunity and Cambiar Smid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambiar Opportunity Fund and Cambiar Smid Fund, you can compare the effects of market volatilities on Cambiar Opportunity and Cambiar Smid 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 Cambiar Opportunity with a short position of Cambiar Smid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambiar Opportunity and Cambiar Smid.
Diversification Opportunities for Cambiar Opportunity and Cambiar Smid
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cambiar and Cambiar is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Cambiar Opportunity Fund and Cambiar Smid Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambiar Smid and Cambiar Opportunity 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 Cambiar Opportunity Fund are associated (or correlated) with Cambiar Smid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambiar Smid has no effect on the direction of Cambiar Opportunity i.e., Cambiar Opportunity and Cambiar Smid go up and down completely randomly.
Pair Corralation between Cambiar Opportunity and Cambiar Smid
Assuming the 90 days horizon Cambiar Opportunity is expected to generate 1.04 times less return on investment than Cambiar Smid. But when comparing it to its historical volatility, Cambiar Opportunity Fund is 1.32 times less risky than Cambiar Smid. It trades about 0.25 of its potential returns per unit of risk. Cambiar Smid Fund is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,484 in Cambiar Smid Fund on September 2, 2024 and sell it today you would earn a total of 100.00 from holding Cambiar Smid Fund or generate 4.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambiar Opportunity Fund vs. Cambiar Smid Fund
Performance |
| Timeline |
| Cambiar Opportunity |
| Cambiar Smid |
Cambiar Opportunity and Cambiar Smid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambiar Opportunity and Cambiar Smid
The main advantage of trading using opposite Cambiar Opportunity and Cambiar Smid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambiar Opportunity position performs unexpectedly, Cambiar Smid 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 Cambiar Smid will offset losses from the drop in Cambiar Smid's long position.| Cambiar Opportunity vs. Boston Partners Small | Cambiar Opportunity vs. Hennessy Nerstone Mid | Cambiar Opportunity vs. Queens Road Small | Cambiar Opportunity vs. Royce Opportunity Fund |
| Cambiar Smid vs. Cambiar International Equity | Cambiar Smid vs. Cambiar Small Cap | Cambiar Smid vs. Cambiar Opportunity Fund | Cambiar Smid vs. Cambiar Small Cap |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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