Correlation Between IShares Core and Cambria Trinity
Can any of the company-specific risk be diversified away by investing in both IShares Core and Cambria Trinity 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 Trinity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SP and Cambria Trinity ETF, you can compare the effects of market volatilities on IShares Core and Cambria Trinity 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 Trinity. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Cambria Trinity.
Diversification Opportunities for IShares Core and Cambria Trinity
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Cambria is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and Cambria Trinity ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Trinity ETF 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 SP are associated (or correlated) with Cambria Trinity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Trinity ETF has no effect on the direction of IShares Core i.e., IShares Core and Cambria Trinity go up and down completely randomly.
Pair Corralation between IShares Core and Cambria Trinity
Considering the 90-day investment horizon iShares Core SP is expected to generate 1.72 times more return on investment than Cambria Trinity. However, IShares Core is 1.72 times more volatile than Cambria Trinity ETF. It trades about 0.15 of its potential returns per unit of risk. Cambria Trinity ETF is currently generating about 0.14 per unit of risk. If you would invest 58,455 in iShares Core SP on August 30, 2024 and sell it today you would earn a total of 1,727 from holding iShares Core SP or generate 2.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core SP vs. Cambria Trinity ETF
Performance |
| Timeline |
| iShares Core SP |
| Cambria Trinity ETF |
IShares Core and Cambria Trinity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Cambria Trinity
The main advantage of trading using opposite IShares Core and Cambria Trinity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Cambria Trinity 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 Trinity will offset losses from the drop in Cambria Trinity's long position.| IShares Core vs. iShares Core SP | IShares Core vs. iShares Core SP | IShares Core vs. iShares SP 500 | IShares Core vs. iShares Russell 2000 |
| Cambria Trinity vs. Cambria Global Asset | Cambria Trinity vs. Cambria Global Momentum | Cambria Trinity vs. Cambria Emerging Shareholder | Cambria Trinity 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |