Correlation Between Cambria Global and Investment Managers
Can any of the company-specific risk be diversified away by investing in both Cambria Global and Investment Managers 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 Investment Managers 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 Investment Managers Series, you can compare the effects of market volatilities on Cambria Global and Investment Managers 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 Investment Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambria Global and Investment Managers.
Diversification Opportunities for Cambria Global and Investment Managers
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cambria and Investment is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Cambria Global Asset and Investment Managers Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment Managers 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 Investment Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment Managers has no effect on the direction of Cambria Global i.e., Cambria Global and Investment Managers go up and down completely randomly.
Pair Corralation between Cambria Global and Investment Managers
Considering the 90-day investment horizon Cambria Global Asset is expected to generate 0.74 times more return on investment than Investment Managers. However, Cambria Global Asset is 1.35 times less risky than Investment Managers. It trades about 0.07 of its potential returns per unit of risk. Investment Managers Series is currently generating about 0.04 per unit of risk. If you would invest 2,731 in Cambria Global Asset on September 1, 2024 and sell it today you would earn a total of 203.00 from holding Cambria Global Asset or generate 7.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.47% |
| Values | Daily Returns |
Cambria Global Asset vs. Investment Managers Series
Performance |
| Timeline |
| Cambria Global Asset |
| Investment Managers |
Cambria Global and Investment Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambria Global and Investment Managers
The main advantage of trading using opposite Cambria Global and Investment Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambria Global position performs unexpectedly, Investment Managers 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 Investment Managers will offset losses from the drop in Investment Managers' 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 |
| Investment Managers vs. VanEck Inflation Allocation | Investment Managers vs. Horizon Kinetics Inflation | Investment Managers vs. SPDR SSgA Multi Asset | Investment Managers vs. Simplify Interest Rate |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |