Correlation Between Cambria Global and Amplify High
Can any of the company-specific risk be diversified away by investing in both Cambria Global and Amplify High 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 Amplify High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambria Global Momentum and Amplify High Income, you can compare the effects of market volatilities on Cambria Global and Amplify High 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 Amplify High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambria Global and Amplify High.
Diversification Opportunities for Cambria Global and Amplify High
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cambria and Amplify is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Cambria Global Momentum and Amplify High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify High 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 Momentum are associated (or correlated) with Amplify High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify High Income has no effect on the direction of Cambria Global i.e., Cambria Global and Amplify High go up and down completely randomly.
Pair Corralation between Cambria Global and Amplify High
Given the investment horizon of 90 days Cambria Global is expected to generate 1.53 times less return on investment than Amplify High. In addition to that, Cambria Global is 1.59 times more volatile than Amplify High Income. It trades about 0.05 of its total potential returns per unit of risk. Amplify High Income is currently generating about 0.12 per unit of volatility. If you would invest 966.00 in Amplify High Income on September 1, 2024 and sell it today you would earn a total of 253.00 from holding Amplify High Income or generate 26.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambria Global Momentum vs. Amplify High Income
Performance |
| Timeline |
| Cambria Global Momentum |
| Amplify High Income |
Cambria Global and Amplify High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambria Global and Amplify High
The main advantage of trading using opposite Cambria Global and Amplify High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambria Global position performs unexpectedly, Amplify High 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 Amplify High will offset losses from the drop in Amplify High's long position.| Cambria Global vs. Cambria Global Asset | Cambria Global vs. Cambria Global Value | Cambria Global vs. Cambria Foreign Shareholder | Cambria Global vs. Cambria Value and |
| Amplify High vs. Invesco KBW High | Amplify High vs. Invesco CEF Income | Amplify High vs. Global X SuperDividend | Amplify High vs. Arrow ETF Trust |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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