Correlation Between Alpha Architect and Cambria Global
Can any of the company-specific risk be diversified away by investing in both Alpha Architect 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 Alpha Architect and Cambria Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha Architect International and Cambria Global Momentum, you can compare the effects of market volatilities on Alpha Architect 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 Alpha Architect with a short position of Cambria Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Architect and Cambria Global.
Diversification Opportunities for Alpha Architect and Cambria Global
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alpha and Cambria is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Architect International 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 Alpha Architect 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 Alpha Architect International 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 Alpha Architect i.e., Alpha Architect and Cambria Global go up and down completely randomly.
Pair Corralation between Alpha Architect and Cambria Global
Given the investment horizon of 90 days Alpha Architect is expected to generate 2.32 times less return on investment than Cambria Global. In addition to that, Alpha Architect is 1.16 times more volatile than Cambria Global Momentum. It trades about 0.07 of its total potential returns per unit of risk. Cambria Global Momentum is currently generating about 0.2 per unit of volatility. If you would invest 2,885 in Cambria Global Momentum on October 21, 2024 and sell it today you would earn a total of 71.00 from holding Cambria Global Momentum or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alpha Architect International vs. Cambria Global Momentum
Performance |
| Timeline |
| Alpha Architect Inte |
| Cambria Global Momentum |
Alpha Architect and Cambria Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpha Architect and Cambria Global
The main advantage of trading using opposite Alpha Architect and Cambria Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Architect 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.| Alpha Architect vs. JPMorgan Fundamental Data | Alpha Architect vs. Matthews China Discovery | Alpha Architect vs. Davis Select International | Alpha Architect vs. Dimensional ETF Trust |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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