Correlation Between Cambria Global and Cambria Foreign
Can any of the company-specific risk be diversified away by investing in both Cambria Global and Cambria Foreign 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 Cambria Foreign 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 Cambria Foreign Shareholder, you can compare the effects of market volatilities on Cambria Global and Cambria Foreign 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 Cambria Foreign. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambria Global and Cambria Foreign.
Diversification Opportunities for Cambria Global and Cambria Foreign
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cambria and Cambria is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Cambria Global Value and Cambria Foreign Shareholder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Foreign Shar 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 Cambria Foreign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Foreign Shar has no effect on the direction of Cambria Global i.e., Cambria Global and Cambria Foreign go up and down completely randomly.
Pair Corralation between Cambria Global and Cambria Foreign
Given the investment horizon of 90 days Cambria Global Value is expected to under-perform the Cambria Foreign. In addition to that, Cambria Global is 1.16 times more volatile than Cambria Foreign Shareholder. It trades about -0.18 of its total potential returns per unit of risk. Cambria Foreign Shareholder is currently generating about -0.11 per unit of volatility. If you would invest 2,663 in Cambria Foreign Shareholder on August 28, 2024 and sell it today you would lose (59.00) from holding Cambria Foreign Shareholder or give up 2.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambria Global Value vs. Cambria Foreign Shareholder
Performance |
| Timeline |
| Cambria Global Value |
| Cambria Foreign Shar |
Cambria Global and Cambria Foreign Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambria Global and Cambria Foreign
The main advantage of trading using opposite Cambria Global and Cambria Foreign positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambria Global position performs unexpectedly, Cambria Foreign 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 Foreign will offset losses from the drop in Cambria Foreign's long position.| Cambria Global vs. Cambria Foreign Shareholder | Cambria Global vs. Cambria Global Momentum | Cambria Global vs. Cambria Emerging Shareholder | Cambria Global vs. Cambria Global Asset |
| Cambria Foreign vs. Cambria Shareholder Yield | Cambria Foreign vs. Cambria Emerging Shareholder | Cambria Foreign vs. Cambria Global Value | Cambria Foreign vs. Cambria Global Momentum |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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