Correlation Between Cambria Global and Invesco Multi
Can any of the company-specific risk be diversified away by investing in both Cambria Global and Invesco Multi 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 Invesco Multi 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 Invesco Multi Strategy Alternative, you can compare the effects of market volatilities on Cambria Global and Invesco Multi 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 Invesco Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambria Global and Invesco Multi.
Diversification Opportunities for Cambria Global and Invesco Multi
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cambria and Invesco is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cambria Global Asset and Invesco Multi Strategy Alterna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Multi Strategy 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 Invesco Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Multi Strategy has no effect on the direction of Cambria Global i.e., Cambria Global and Invesco Multi go up and down completely randomly.
Pair Corralation between Cambria Global and Invesco Multi
Considering the 90-day investment horizon Cambria Global is expected to generate 1.16 times less return on investment than Invesco Multi. In addition to that, Cambria Global is 1.45 times more volatile than Invesco Multi Strategy Alternative. It trades about 0.08 of its total potential returns per unit of risk. Invesco Multi Strategy Alternative is currently generating about 0.13 per unit of volatility. If you would invest 2,106 in Invesco Multi Strategy Alternative on August 30, 2024 and sell it today you would earn a total of 24.00 from holding Invesco Multi Strategy Alternative or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambria Global Asset vs. Invesco Multi Strategy Alterna
Performance |
| Timeline |
| Cambria Global Asset |
| Invesco Multi Strategy |
Cambria Global and Invesco Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambria Global and Invesco Multi
The main advantage of trading using opposite Cambria Global and Invesco Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambria Global position performs unexpectedly, Invesco Multi 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 Invesco Multi will offset losses from the drop in Invesco Multi'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 |
| Invesco Multi vs. SPDR SSgA Multi Asset | Invesco Multi vs. SPDR SSgA Global | Invesco Multi vs. Investment Managers Series | Invesco Multi vs. Cambria Global Asset |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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