Correlation Between IQ 50 and Cambria Global
Can any of the company-specific risk be diversified away by investing in both IQ 50 and Cambria Global 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 IQ 50 and Cambria Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IQ 50 Percent and Cambria Global Momentum, you can compare the effects of market volatilities on IQ 50 and Cambria Global 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 IQ 50 with a short position of Cambria Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQ 50 and Cambria Global.
Diversification Opportunities for IQ 50 and Cambria Global
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between HFXI and Cambria is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding IQ 50 Percent and Cambria Global Momentum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Global Momentum and IQ 50 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 IQ 50 Percent are associated (or correlated) with Cambria Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Global Momentum has no effect on the direction of IQ 50 i.e., IQ 50 and Cambria Global go up and down completely randomly.
Pair Corralation between IQ 50 and Cambria Global
Given the investment horizon of 90 days IQ 50 Percent is expected to under-perform the Cambria Global. But the etf apears to be less risky and, when comparing its historical volatility, IQ 50 Percent is 1.24 times less risky than Cambria Global. The etf trades about -0.04 of its potential returns per unit of risk. The Cambria Global Momentum is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,823 in Cambria Global Momentum on September 2, 2024 and sell it today you would earn a total of 222.00 from holding Cambria Global Momentum or generate 7.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IQ 50 Percent vs. Cambria Global Momentum
Performance |
| Timeline |
| IQ 50 Percent |
| Cambria Global Momentum |
IQ 50 and Cambria Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQ 50 and Cambria Global
The main advantage of trading using opposite IQ 50 and Cambria Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQ 50 position performs unexpectedly, Cambria Global 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 Global will offset losses from the drop in Cambria Global's long position.| IQ 50 vs. iShares Currency Hedged | IQ 50 vs. Xtrackers MSCI All | IQ 50 vs. iShares Currency Hedged | IQ 50 vs. WisdomTree International Hedged |
| Cambria Global vs. Cambria Global Asset | Cambria Global vs. Cambria Global Value | Cambria Global vs. Cambria Foreign Shareholder | Cambria Global vs. Cambria Value and |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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