Correlation Between FlexShares International and Cambria ETF
Can any of the company-specific risk be diversified away by investing in both FlexShares International and Cambria ETF 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 FlexShares International and Cambria ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FlexShares International Quality and Cambria ETF Trust, you can compare the effects of market volatilities on FlexShares International and Cambria ETF 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 FlexShares International with a short position of Cambria ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of FlexShares International and Cambria ETF.
Diversification Opportunities for FlexShares International and Cambria ETF
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FlexShares and Cambria is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding FlexShares International Quali and Cambria ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria ETF Trust and FlexShares International 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 FlexShares International Quality are associated (or correlated) with Cambria ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria ETF Trust has no effect on the direction of FlexShares International i.e., FlexShares International and Cambria ETF go up and down completely randomly.
Pair Corralation between FlexShares International and Cambria ETF
Given the investment horizon of 90 days FlexShares International Quality is expected to generate 1.02 times more return on investment than Cambria ETF. However, FlexShares International is 1.02 times more volatile than Cambria ETF Trust. It trades about 0.01 of its potential returns per unit of risk. Cambria ETF Trust is currently generating about -0.05 per unit of risk. If you would invest 2,504 in FlexShares International Quality on September 12, 2024 and sell it today you would earn a total of 1.00 from holding FlexShares International Quality or generate 0.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FlexShares International Quali vs. Cambria ETF Trust
Performance |
| Timeline |
| FlexShares International |
| Cambria ETF Trust |
FlexShares International and Cambria ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FlexShares International and Cambria ETF
The main advantage of trading using opposite FlexShares International and Cambria ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FlexShares International position performs unexpectedly, Cambria ETF 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 ETF will offset losses from the drop in Cambria ETF's long position.| FlexShares International vs. Global X MSCI | FlexShares International vs. Global X Alternative | FlexShares International vs. First Trust Intl | FlexShares International vs. iShares AsiaPacific Dividend |
| Cambria ETF vs. Cambria Emerging Shareholder | Cambria ETF vs. Cambria Trinity ETF | Cambria ETF vs. Cambria Global Value | Cambria ETF vs. Cambria Foreign Shareholder |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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