Correlation Between IShares Micro and Cambria Micro
Can any of the company-specific risk be diversified away by investing in both IShares Micro and Cambria Micro 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 Micro and Cambria Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Micro Cap ETF and Cambria Micro And, you can compare the effects of market volatilities on IShares Micro and Cambria Micro 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 Micro with a short position of Cambria Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Micro and Cambria Micro.
Diversification Opportunities for IShares Micro and Cambria Micro
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Cambria is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding iShares Micro Cap ETF and Cambria Micro And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Micro And and IShares Micro 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 Micro Cap ETF are associated (or correlated) with Cambria Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Micro And has no effect on the direction of IShares Micro i.e., IShares Micro and Cambria Micro go up and down completely randomly.
Pair Corralation between IShares Micro and Cambria Micro
Considering the 90-day investment horizon iShares Micro Cap ETF is expected to under-perform the Cambria Micro. In addition to that, IShares Micro is 1.58 times more volatile than Cambria Micro And. It trades about -0.05 of its total potential returns per unit of risk. Cambria Micro And is currently generating about 0.07 per unit of volatility. If you would invest 2,632 in Cambria Micro And on October 26, 2024 and sell it today you would earn a total of 32.00 from holding Cambria Micro And or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Micro Cap ETF vs. Cambria Micro And
Performance |
| Timeline |
| iShares Micro Cap |
| Cambria Micro And |
IShares Micro and Cambria Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Micro and Cambria Micro
The main advantage of trading using opposite IShares Micro and Cambria Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Micro position performs unexpectedly, Cambria Micro 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 Micro will offset losses from the drop in Cambria Micro's long position.| IShares Micro vs. Simplify Interest Rate | IShares Micro vs. iMGP DBi Managed | IShares Micro vs. Aquagold International | IShares Micro vs. Morningstar Unconstrained Allocation |
| Cambria Micro vs. Research Affiliates Deletions | Cambria Micro vs. First Trust Dow | Cambria Micro vs. iShares Micro Cap ETF | Cambria Micro vs. Vanguard Mega Cap |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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