Correlation Between Cambria Global and IShares International
Can any of the company-specific risk be diversified away by investing in both Cambria Global and IShares International 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 IShares International 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 iShares International Developed, you can compare the effects of market volatilities on Cambria Global and IShares International 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 IShares International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambria Global and IShares International.
Diversification Opportunities for Cambria Global and IShares International
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cambria and IShares is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Cambria Global Value and iShares International Develope in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares International 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 IShares International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares International has no effect on the direction of Cambria Global i.e., Cambria Global and IShares International go up and down completely randomly.
Pair Corralation between Cambria Global and IShares International
Given the investment horizon of 90 days Cambria Global Value is expected to under-perform the IShares International. In addition to that, Cambria Global is 1.39 times more volatile than iShares International Developed. It trades about -0.11 of its total potential returns per unit of risk. iShares International Developed is currently generating about -0.09 per unit of volatility. If you would invest 3,620 in iShares International Developed on August 31, 2024 and sell it today you would lose (52.10) from holding iShares International Developed or give up 1.44% 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. iShares International Develope
Performance |
| Timeline |
| Cambria Global Value |
| iShares International |
Cambria Global and IShares International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambria Global and IShares International
The main advantage of trading using opposite Cambria Global and IShares International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambria Global position performs unexpectedly, IShares International 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 IShares International will offset losses from the drop in IShares International'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 |
| IShares International vs. iShares Morningstar Small Cap | IShares International vs. iShares Edge MSCI | IShares International vs. iShares MSCI Intl | IShares International vs. iShares Small Cap |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |