Correlation Between Cambria Global and Schwab Fundamental
Can any of the company-specific risk be diversified away by investing in both Cambria Global and Schwab Fundamental 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 Schwab Fundamental 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 Schwab Fundamental International, you can compare the effects of market volatilities on Cambria Global and Schwab Fundamental 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 Schwab Fundamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambria Global and Schwab Fundamental.
Diversification Opportunities for Cambria Global and Schwab Fundamental
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cambria and Schwab is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Cambria Global Value and Schwab Fundamental Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schwab Fundamental 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 Schwab Fundamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schwab Fundamental has no effect on the direction of Cambria Global i.e., Cambria Global and Schwab Fundamental go up and down completely randomly.
Pair Corralation between Cambria Global and Schwab Fundamental
Given the investment horizon of 90 days Cambria Global is expected to generate 1.11 times less return on investment than Schwab Fundamental. In addition to that, Cambria Global is 1.07 times more volatile than Schwab Fundamental International. It trades about 0.05 of its total potential returns per unit of risk. Schwab Fundamental International is currently generating about 0.06 per unit of volatility. If you would invest 2,779 in Schwab Fundamental International on August 28, 2024 and sell it today you would earn a total of 730.00 from holding Schwab Fundamental International or generate 26.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambria Global Value vs. Schwab Fundamental Internation
Performance |
| Timeline |
| Cambria Global Value |
| Schwab Fundamental |
Cambria Global and Schwab Fundamental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambria Global and Schwab Fundamental
The main advantage of trading using opposite Cambria Global and Schwab Fundamental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambria Global position performs unexpectedly, Schwab Fundamental 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 Schwab Fundamental will offset losses from the drop in Schwab Fundamental's long position.| Cambria Global vs. Schwab Fundamental International | Cambria Global vs. Schwab Fundamental Emerging | Cambria Global vs. Schwab Fundamental Small | Cambria Global vs. Schwab Fundamental Large |
| Schwab Fundamental vs. Schwab Fundamental Small | Schwab Fundamental vs. Schwab Fundamental Large | Schwab Fundamental vs. Schwab Fundamental International | Schwab Fundamental vs. Schwab Fundamental Emerging |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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