Correlation Between Cambria Foreign and Cambria Emerging
Can any of the company-specific risk be diversified away by investing in both Cambria Foreign 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 Cambria Foreign and Cambria Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambria Foreign Shareholder and Cambria Emerging Shareholder, you can compare the effects of market volatilities on Cambria Foreign 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 Cambria Foreign with a short position of Cambria Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambria Foreign and Cambria Emerging.
Diversification Opportunities for Cambria Foreign and Cambria Emerging
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cambria and Cambria is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Cambria Foreign Shareholder 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 Cambria Foreign 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 Foreign Shareholder 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 Cambria Foreign i.e., Cambria Foreign and Cambria Emerging go up and down completely randomly.
Pair Corralation between Cambria Foreign and Cambria Emerging
Given the investment horizon of 90 days Cambria Foreign Shareholder is expected to generate 0.88 times more return on investment than Cambria Emerging. However, Cambria Foreign Shareholder is 1.14 times less risky than Cambria Emerging. It trades about -0.11 of its potential returns per unit of risk. Cambria Emerging Shareholder is currently generating about -0.11 per unit of risk. If you would invest 2,663 in Cambria Foreign Shareholder on August 28, 2024 and sell it today you would lose (59.00) from holding Cambria Foreign Shareholder or give up 2.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambria Foreign Shareholder vs. Cambria Emerging Shareholder
Performance |
| Timeline |
| Cambria Foreign Shar |
| Cambria Emerging Sha |
Cambria Foreign and Cambria Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambria Foreign and Cambria Emerging
The main advantage of trading using opposite Cambria Foreign and Cambria Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambria Foreign 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.| Cambria Foreign vs. Cambria Shareholder Yield | Cambria Foreign vs. Cambria Emerging Shareholder | Cambria Foreign vs. Cambria Global Value | Cambria Foreign vs. Cambria Global Momentum |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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