Correlation Between Cambria Global and SPDR SSgA
Can any of the company-specific risk be diversified away by investing in both Cambria Global and SPDR SSgA 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 SPDR SSgA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambria Global Asset and SPDR SSgA Income, you can compare the effects of market volatilities on Cambria Global and SPDR SSgA 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 SPDR SSgA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambria Global and SPDR SSgA.
Diversification Opportunities for Cambria Global and SPDR SSgA
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cambria and SPDR is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Cambria Global Asset and SPDR SSgA Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSgA Income 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 Asset are associated (or correlated) with SPDR SSgA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SSgA Income has no effect on the direction of Cambria Global i.e., Cambria Global and SPDR SSgA go up and down completely randomly.
Pair Corralation between Cambria Global and SPDR SSgA
Considering the 90-day investment horizon Cambria Global Asset is expected to generate 1.29 times more return on investment than SPDR SSgA. However, Cambria Global is 1.29 times more volatile than SPDR SSgA Income. It trades about 0.18 of its potential returns per unit of risk. SPDR SSgA Income is currently generating about 0.22 per unit of risk. If you would invest 2,859 in Cambria Global Asset on November 3, 2024 and sell it today you would earn a total of 55.00 from holding Cambria Global Asset or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambria Global Asset vs. SPDR SSgA Income
Performance |
| Timeline |
| Cambria Global Asset |
| SPDR SSgA Income |
Cambria Global and SPDR SSgA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambria Global and SPDR SSgA
The main advantage of trading using opposite Cambria Global and SPDR SSgA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambria Global position performs unexpectedly, SPDR SSgA 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 SPDR SSgA will offset losses from the drop in SPDR SSgA's long position.| Cambria Global vs. Cambria Global Momentum | Cambria Global vs. Cambria Global Value | Cambria Global vs. Cambria Foreign Shareholder | Cambria Global vs. Cambria Trinity ETF |
| SPDR SSgA vs. First Trust Multi Asset | SPDR SSgA vs. Collaborative Investment Series | SPDR SSgA vs. Northern Lights | SPDR SSgA vs. Ocean Park International |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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