Correlation Between IShares ESG and Cambria Trinity
Can any of the company-specific risk be diversified away by investing in both IShares ESG and Cambria Trinity 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 ESG and Cambria Trinity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares ESG Aware and Cambria Trinity ETF, you can compare the effects of market volatilities on IShares ESG and Cambria Trinity 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 ESG with a short position of Cambria Trinity. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares ESG and Cambria Trinity.
Diversification Opportunities for IShares ESG and Cambria Trinity
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and Cambria is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding iShares ESG Aware and Cambria Trinity ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Trinity ETF and IShares ESG 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 ESG Aware are associated (or correlated) with Cambria Trinity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Trinity ETF has no effect on the direction of IShares ESG i.e., IShares ESG and Cambria Trinity go up and down completely randomly.
Pair Corralation between IShares ESG and Cambria Trinity
Given the investment horizon of 90 days iShares ESG Aware is expected to generate 1.15 times more return on investment than Cambria Trinity. However, IShares ESG is 1.15 times more volatile than Cambria Trinity ETF. It trades about 0.09 of its potential returns per unit of risk. Cambria Trinity ETF is currently generating about 0.05 per unit of risk. If you would invest 3,031 in iShares ESG Aware on September 12, 2024 and sell it today you would earn a total of 669.00 from holding iShares ESG Aware or generate 22.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares ESG Aware vs. Cambria Trinity ETF
Performance |
| Timeline |
| iShares ESG Aware |
| Cambria Trinity ETF |
IShares ESG and Cambria Trinity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares ESG and Cambria Trinity
The main advantage of trading using opposite IShares ESG and Cambria Trinity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares ESG position performs unexpectedly, Cambria Trinity 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 Trinity will offset losses from the drop in Cambria Trinity's long position.| IShares ESG vs. Cambria Trinity ETF | IShares ESG vs. Northern Lights | IShares ESG vs. Cambria Global Momentum | IShares ESG vs. Alpha Architect Value |
| Cambria Trinity vs. FT Cboe Vest | Cambria Trinity vs. First Trust Exchange Traded | Cambria Trinity vs. FT Cboe Vest | Cambria Trinity vs. Anfield Equity Sector |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |