Correlation Between SPDR SSgA and Cambria Global
Can any of the company-specific risk be diversified away by investing in both SPDR SSgA and Cambria Global 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 SPDR SSgA and Cambria Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SSgA Global and Cambria Global Asset, you can compare the effects of market volatilities on SPDR SSgA and Cambria Global 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 SPDR SSgA with a short position of Cambria Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SSgA and Cambria Global.
Diversification Opportunities for SPDR SSgA and Cambria Global
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and Cambria is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SSgA Global and Cambria Global Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Global Asset and SPDR SSgA 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 SPDR SSgA Global are associated (or correlated) with Cambria Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Global Asset has no effect on the direction of SPDR SSgA i.e., SPDR SSgA and Cambria Global go up and down completely randomly.
Pair Corralation between SPDR SSgA and Cambria Global
Considering the 90-day investment horizon SPDR SSgA Global is expected to generate 0.86 times more return on investment than Cambria Global. However, SPDR SSgA Global is 1.16 times less risky than Cambria Global. It trades about 0.09 of its potential returns per unit of risk. Cambria Global Asset is currently generating about 0.07 per unit of risk. If you would invest 4,155 in SPDR SSgA Global on September 1, 2024 and sell it today you would earn a total of 387.00 from holding SPDR SSgA Global or generate 9.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SSgA Global vs. Cambria Global Asset
Performance |
| Timeline |
| SPDR SSgA Global |
| Cambria Global Asset |
SPDR SSgA and Cambria Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SSgA and Cambria Global
The main advantage of trading using opposite SPDR SSgA and Cambria Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SSgA position performs unexpectedly, Cambria Global 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 Global will offset losses from the drop in Cambria Global's long position.| SPDR SSgA vs. SPDR SSgA Income | SPDR SSgA vs. SPDR SSgA Multi Asset | SPDR SSgA vs. SPDR Bloomberg International | SPDR SSgA vs. SPDR Bloomberg Emerging |
| Cambria Global vs. Cambria Global Momentum | Cambria Global vs. Cambria Global Value | Cambria Global vs. Cambria Foreign Shareholder | Cambria Global vs. Cambria Trinity ETF |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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