Correlation Between Causeway Emerging and Cambiar International
Can any of the company-specific risk be diversified away by investing in both Causeway Emerging and Cambiar International 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 Causeway Emerging and Cambiar International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Causeway Emerging Markets and Cambiar International Equity, you can compare the effects of market volatilities on Causeway Emerging and Cambiar International 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 Causeway Emerging with a short position of Cambiar International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Causeway Emerging and Cambiar International.
Diversification Opportunities for Causeway Emerging and Cambiar International
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Causeway and Cambiar is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Causeway Emerging Markets and Cambiar International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambiar International and Causeway Emerging 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 Causeway Emerging Markets are associated (or correlated) with Cambiar International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambiar International has no effect on the direction of Causeway Emerging i.e., Causeway Emerging and Cambiar International go up and down completely randomly.
Pair Corralation between Causeway Emerging and Cambiar International
Assuming the 90 days horizon Causeway Emerging Markets is expected to generate 1.23 times more return on investment than Cambiar International. However, Causeway Emerging is 1.23 times more volatile than Cambiar International Equity. It trades about -0.19 of its potential returns per unit of risk. Cambiar International Equity is currently generating about -0.31 per unit of risk. If you would invest 1,178 in Causeway Emerging Markets on August 26, 2024 and sell it today you would lose (45.00) from holding Causeway Emerging Markets or give up 3.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Causeway Emerging Markets vs. Cambiar International Equity
Performance |
| Timeline |
| Causeway Emerging Markets |
| Cambiar International |
Causeway Emerging and Cambiar International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Causeway Emerging and Cambiar International
The main advantage of trading using opposite Causeway Emerging and Cambiar International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Causeway Emerging position performs unexpectedly, Cambiar International 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 International will offset losses from the drop in Cambiar International's long position.| Causeway Emerging vs. Baird Smallmid Cap | Causeway Emerging vs. Chartwell Small Cap | Causeway Emerging vs. Touchstone Small Cap | Causeway Emerging vs. Artisan Small Cap |
| Cambiar International vs. Causeway Emerging Markets | Cambiar International vs. Cambiar Small Cap | Cambiar International vs. Pimco Short Term Fund | Cambiar International vs. Cambiar Opportunity Fund |
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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