Correlation Between Cambria Global and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both Cambria Global and ProShares UltraShort 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 Cambria Global and ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambria Global Tail and ProShares UltraShort MSCI, you can compare the effects of market volatilities on Cambria Global and ProShares UltraShort 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 Cambria Global with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambria Global and ProShares UltraShort.
Diversification Opportunities for Cambria Global and ProShares UltraShort
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cambria and ProShares is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cambria Global Tail and ProShares UltraShort MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort MSCI and Cambria Global 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 Cambria Global Tail are associated (or correlated) with ProShares UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort MSCI has no effect on the direction of Cambria Global i.e., Cambria Global and ProShares UltraShort go up and down completely randomly.
Pair Corralation between Cambria Global and ProShares UltraShort
Given the investment horizon of 90 days Cambria Global Tail is expected to generate 0.23 times more return on investment than ProShares UltraShort. However, Cambria Global Tail is 4.34 times less risky than ProShares UltraShort. It trades about 0.08 of its potential returns per unit of risk. ProShares UltraShort MSCI is currently generating about -0.02 per unit of risk. If you would invest 1,636 in Cambria Global Tail on September 12, 2024 and sell it today you would earn a total of 12.00 from holding Cambria Global Tail or generate 0.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambria Global Tail vs. ProShares UltraShort MSCI
Performance |
| Timeline |
| Cambria Global Tail |
| ProShares UltraShort MSCI |
Cambria Global and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambria Global and ProShares UltraShort
The main advantage of trading using opposite Cambria Global and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambria Global position performs unexpectedly, ProShares UltraShort 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 ProShares UltraShort will offset losses from the drop in ProShares UltraShort's long position.| Cambria Global vs. Cambria Tail Risk | Cambria Global vs. Cambria Trinity ETF | Cambria Global vs. Cambria Emerging Shareholder | Cambria Global vs. Cambria Global Momentum |
| ProShares UltraShort vs. ProShares UltraShort MSCI | ProShares UltraShort vs. ProShares Short MSCI | ProShares UltraShort vs. ProShares UltraShort MSCI | ProShares UltraShort vs. ProShares UltraShort Health |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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