Correlation Between Global X and Cambria Emerging
Can any of the company-specific risk be diversified away by investing in both Global X and Cambria Emerging 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 Global X and Cambria Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Funds and Cambria Emerging Shareholder, you can compare the effects of market volatilities on Global X and Cambria Emerging 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 Global X with a short position of Cambria Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Cambria Emerging.
Diversification Opportunities for Global X and Cambria Emerging
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and Cambria is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and Cambria Emerging Shareholder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Emerging Sha and Global X 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 Global X Funds are associated (or correlated) with Cambria Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Emerging Sha has no effect on the direction of Global X i.e., Global X and Cambria Emerging go up and down completely randomly.
Pair Corralation between Global X and Cambria Emerging
Considering the 90-day investment horizon Global X Funds is expected to generate 0.95 times more return on investment than Cambria Emerging. However, Global X Funds is 1.05 times less risky than Cambria Emerging. It trades about 0.02 of its potential returns per unit of risk. Cambria Emerging Shareholder is currently generating about -0.03 per unit of risk. If you would invest 2,626 in Global X Funds on August 28, 2024 and sell it today you would earn a total of 34.00 from holding Global X Funds or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Funds vs. Cambria Emerging Shareholder
Performance |
| Timeline |
| Global X Funds |
| Cambria Emerging Sha |
Global X and Cambria Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Cambria Emerging
The main advantage of trading using opposite Global X and Cambria Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Cambria Emerging 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 Emerging will offset losses from the drop in Cambria Emerging's long position.| Global X vs. Invesco PureBeta MSCI | Global X vs. Aquagold International | Global X vs. Morningstar Unconstrained Allocation | Global X vs. High Yield Municipal Fund |
| Cambria Emerging vs. Cambria Foreign Shareholder | Cambria Emerging vs. Cambria Global Value | Cambria Emerging vs. Cambria Global Momentum | Cambria Emerging vs. Cambria Value and |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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