Correlation Between TrueShares Active and Cambria Trinity
Can any of the company-specific risk be diversified away by investing in both TrueShares Active 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 TrueShares Active and Cambria Trinity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TrueShares Active Yield and Cambria Trinity ETF, you can compare the effects of market volatilities on TrueShares Active 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 TrueShares Active with a short position of Cambria Trinity. Check out your portfolio center. Please also check ongoing floating volatility patterns of TrueShares Active and Cambria Trinity.
Diversification Opportunities for TrueShares Active and Cambria Trinity
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TrueShares and Cambria is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding TrueShares Active Yield 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 TrueShares Active 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 TrueShares Active Yield 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 TrueShares Active i.e., TrueShares Active and Cambria Trinity go up and down completely randomly.
Pair Corralation between TrueShares Active and Cambria Trinity
Given the investment horizon of 90 days TrueShares Active is expected to generate 3.88 times less return on investment than Cambria Trinity. In addition to that, TrueShares Active is 1.16 times more volatile than Cambria Trinity ETF. It trades about 0.03 of its total potential returns per unit of risk. Cambria Trinity ETF is currently generating about 0.15 per unit of volatility. If you would invest 2,593 in Cambria Trinity ETF on September 13, 2024 and sell it today you would earn a total of 29.00 from holding Cambria Trinity ETF or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
TrueShares Active Yield vs. Cambria Trinity ETF
Performance |
| Timeline |
| TrueShares Active Yield |
| Cambria Trinity ETF |
TrueShares Active and Cambria Trinity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TrueShares Active and Cambria Trinity
The main advantage of trading using opposite TrueShares Active and Cambria Trinity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TrueShares Active 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.| TrueShares Active vs. Cambria Trinity ETF | TrueShares Active vs. Northern Lights | TrueShares Active vs. Cambria Global Momentum | TrueShares Active vs. Alpha Architect Value |
| Cambria Trinity vs. Cambria Global Asset | Cambria Trinity vs. Cambria Global Momentum | Cambria Trinity vs. Cambria Emerging Shareholder | Cambria Trinity 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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