Correlation Between IShares Russell and Cambria Global
Can any of the company-specific risk be diversified away by investing in both IShares Russell 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 IShares Russell and Cambria Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Russell 1000 and Cambria Global Value, you can compare the effects of market volatilities on IShares Russell 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 IShares Russell with a short position of Cambria Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Russell and Cambria Global.
Diversification Opportunities for IShares Russell and Cambria Global
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between IShares and Cambria is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding iShares Russell 1000 and Cambria Global Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Global Value and IShares Russell 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 Russell 1000 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 Value has no effect on the direction of IShares Russell i.e., IShares Russell and Cambria Global go up and down completely randomly.
Pair Corralation between IShares Russell and Cambria Global
Considering the 90-day investment horizon iShares Russell 1000 is expected to generate 1.31 times more return on investment than Cambria Global. However, IShares Russell is 1.31 times more volatile than Cambria Global Value. It trades about 0.09 of its potential returns per unit of risk. Cambria Global Value is currently generating about 0.07 per unit of risk. If you would invest 32,784 in iShares Russell 1000 on November 5, 2024 and sell it today you would earn a total of 8,289 from holding iShares Russell 1000 or generate 25.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Russell 1000 vs. Cambria Global Value
Performance |
| Timeline |
| iShares Russell 1000 |
| Cambria Global Value |
IShares Russell and Cambria Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Russell and Cambria Global
The main advantage of trading using opposite IShares Russell and Cambria Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Russell 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.| IShares Russell vs. iShares Russell 1000 | IShares Russell vs. iShares Russell 2000 | IShares Russell vs. iShares Russell 2000 | IShares Russell vs. iShares Russell 1000 |
| Cambria Global vs. Cambria Foreign Shareholder | Cambria Global vs. Cambria Global Momentum | Cambria Global vs. Cambria Emerging Shareholder | Cambria Global vs. Cambria Global Asset |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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