Correlation Between IShares Core and Cambria Emerging
Can any of the company-specific risk be diversified away by investing in both IShares Core and Cambria Emerging 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 IShares Core and Cambria Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core MSCI and Cambria Emerging Shareholder, you can compare the effects of market volatilities on IShares Core and Cambria Emerging 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 IShares Core with a short position of Cambria Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Cambria Emerging.
Diversification Opportunities for IShares Core and Cambria Emerging
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Cambria is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI and Cambria Emerging Shareholder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Emerging Sha and IShares Core 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 iShares Core MSCI are associated (or correlated) with Cambria Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Emerging Sha has no effect on the direction of IShares Core i.e., IShares Core and Cambria Emerging go up and down completely randomly.
Pair Corralation between IShares Core and Cambria Emerging
Given the investment horizon of 90 days iShares Core MSCI is expected to under-perform the Cambria Emerging. But the etf apears to be less risky and, when comparing its historical volatility, iShares Core MSCI is 1.02 times less risky than Cambria Emerging. The etf trades about -0.15 of its potential returns per unit of risk. The Cambria Emerging Shareholder is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 3,332 in Cambria Emerging Shareholder on August 31, 2024 and sell it today you would lose (85.00) from holding Cambria Emerging Shareholder or give up 2.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core MSCI vs. Cambria Emerging Shareholder
Performance |
| Timeline |
| iShares Core MSCI |
| Cambria Emerging Sha |
IShares Core and Cambria Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Cambria Emerging
The main advantage of trading using opposite IShares Core and Cambria Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Cambria Emerging 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 Emerging will offset losses from the drop in Cambria Emerging's long position.| IShares Core vs. iShares MSCI China | IShares Core vs. iShares Dividend and | IShares Core vs. iShares MSCI Frontier | IShares Core vs. iShares Exponential Technologies |
| Cambria Emerging vs. Cambria Foreign Shareholder | Cambria Emerging vs. Cambria Global Value | Cambria Emerging vs. Cambria Global Momentum | Cambria Emerging 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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