Correlation Between Cambria Global and Adaptive Alpha
Can any of the company-specific risk be diversified away by investing in both Cambria Global and Adaptive Alpha 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 Adaptive Alpha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambria Global Value and Adaptive Alpha Opportunities, you can compare the effects of market volatilities on Cambria Global and Adaptive Alpha 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 Adaptive Alpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambria Global and Adaptive Alpha.
Diversification Opportunities for Cambria Global and Adaptive Alpha
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cambria and Adaptive is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Cambria Global Value and Adaptive Alpha Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaptive Alpha Oppor 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 Value are associated (or correlated) with Adaptive Alpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaptive Alpha Oppor has no effect on the direction of Cambria Global i.e., Cambria Global and Adaptive Alpha go up and down completely randomly.
Pair Corralation between Cambria Global and Adaptive Alpha
Given the investment horizon of 90 days Cambria Global is expected to generate 1.74 times less return on investment than Adaptive Alpha. But when comparing it to its historical volatility, Cambria Global Value is 1.09 times less risky than Adaptive Alpha. It trades about 0.05 of its potential returns per unit of risk. Adaptive Alpha Opportunities is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,121 in Adaptive Alpha Opportunities on September 3, 2024 and sell it today you would earn a total of 834.00 from holding Adaptive Alpha Opportunities or generate 39.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambria Global Value vs. Adaptive Alpha Opportunities
Performance |
| Timeline |
| Cambria Global Value |
| Adaptive Alpha Oppor |
Cambria Global and Adaptive Alpha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambria Global and Adaptive Alpha
The main advantage of trading using opposite Cambria Global and Adaptive Alpha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambria Global position performs unexpectedly, Adaptive Alpha 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 Adaptive Alpha will offset losses from the drop in Adaptive Alpha's long position.| Cambria Global vs. Dawson Geophysical | Cambria Global vs. Oceaneering International | Cambria Global vs. Sprott Inc | Cambria Global vs. Bolt Biotherapeutics |
| Adaptive Alpha vs. FT Cboe Vest | Adaptive Alpha vs. First Trust Exchange Traded | Adaptive Alpha vs. FT Cboe Vest | Adaptive Alpha vs. Anfield Equity Sector |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |