Correlation Between IShares Russell and Cambria Micro
Can any of the company-specific risk be diversified away by investing in both IShares Russell 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 Russell 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 Russell 2000 and Cambria Micro And, you can compare the effects of market volatilities on IShares Russell 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 Russell with a short position of Cambria Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Russell and Cambria Micro.
Diversification Opportunities for IShares Russell and Cambria Micro
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and Cambria is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares Russell 2000 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 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 2000 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 Russell i.e., IShares Russell and Cambria Micro go up and down completely randomly.
Pair Corralation between IShares Russell and Cambria Micro
Considering the 90-day investment horizon iShares Russell 2000 is expected to generate 1.09 times more return on investment than Cambria Micro. However, IShares Russell is 1.09 times more volatile than Cambria Micro And. It trades about 0.05 of its potential returns per unit of risk. Cambria Micro And is currently generating about 0.05 per unit of risk. If you would invest 16,671 in iShares Russell 2000 on October 26, 2024 and sell it today you would earn a total of 151.00 from holding iShares Russell 2000 or generate 0.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Russell 2000 vs. Cambria Micro And
Performance |
| Timeline |
| iShares Russell 2000 |
| Cambria Micro And |
IShares Russell and Cambria Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Russell and Cambria Micro
The main advantage of trading using opposite IShares Russell and Cambria Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Russell 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 Russell vs. iShares Russell 2000 | IShares Russell vs. iShares Russell 1000 | IShares Russell vs. iShares Russell Mid Cap | IShares Russell vs. iShares Russell 1000 |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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