Correlation Between Cambria Micro and Vanguard Small
Can any of the company-specific risk be diversified away by investing in both Cambria Micro and Vanguard Small 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 Cambria Micro and Vanguard Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambria Micro And and Vanguard Small Cap Value, you can compare the effects of market volatilities on Cambria Micro and Vanguard Small 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 Cambria Micro with a short position of Vanguard Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambria Micro and Vanguard Small.
Diversification Opportunities for Cambria Micro and Vanguard Small
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cambria and Vanguard is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Cambria Micro And and Vanguard Small Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Small Cap and Cambria 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 Cambria Micro And are associated (or correlated) with Vanguard Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Small Cap has no effect on the direction of Cambria Micro i.e., Cambria Micro and Vanguard Small go up and down completely randomly.
Pair Corralation between Cambria Micro and Vanguard Small
Given the investment horizon of 90 days Cambria Micro And is expected to generate 1.33 times more return on investment than Vanguard Small. However, Cambria Micro is 1.33 times more volatile than Vanguard Small Cap Value. It trades about 0.26 of its potential returns per unit of risk. Vanguard Small Cap Value is currently generating about 0.33 per unit of risk. If you would invest 2,585 in Cambria Micro And on September 2, 2024 and sell it today you would earn a total of 234.00 from holding Cambria Micro And or generate 9.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambria Micro And vs. Vanguard Small Cap Value
Performance |
| Timeline |
| Cambria Micro And |
| Vanguard Small Cap |
Cambria Micro and Vanguard Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambria Micro and Vanguard Small
The main advantage of trading using opposite Cambria Micro and Vanguard Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambria Micro position performs unexpectedly, Vanguard Small 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 Vanguard Small will offset losses from the drop in Vanguard Small's long position.| Cambria Micro vs. FT Vest Equity | Cambria Micro vs. Northern Lights | Cambria Micro vs. Dimensional International High | Cambria Micro vs. Matthews China Discovery |
| Vanguard Small vs. Vanguard Mid Cap Value | Vanguard Small vs. Vanguard Small Cap Growth | Vanguard Small vs. Vanguard Value Index | Vanguard Small vs. Vanguard Small Cap Index |
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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