Correlation Between NYSE Composite and Cambria Foreign
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Cambria Foreign 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 NYSE Composite and Cambria Foreign into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Cambria Foreign Shareholder, you can compare the effects of market volatilities on NYSE Composite and Cambria Foreign 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 NYSE Composite with a short position of Cambria Foreign. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Cambria Foreign.
Diversification Opportunities for NYSE Composite and Cambria Foreign
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Cambria is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Cambria Foreign Shareholder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Foreign Shar and NYSE Composite 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 NYSE Composite are associated (or correlated) with Cambria Foreign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Foreign Shar has no effect on the direction of NYSE Composite i.e., NYSE Composite and Cambria Foreign go up and down completely randomly.
Pair Corralation between NYSE Composite and Cambria Foreign
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.74 times more return on investment than Cambria Foreign. However, NYSE Composite is 1.35 times less risky than Cambria Foreign. It trades about 0.24 of its potential returns per unit of risk. Cambria Foreign Shareholder is currently generating about -0.17 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 28, 2024 and sell it today you would earn a total of 66,978 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Cambria Foreign Shareholder
Performance |
| Timeline |
NYSE Composite and Cambria Foreign Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Cambria Foreign Shareholder
Pair trading matchups for Cambria Foreign
Pair Trading with NYSE Composite and Cambria Foreign
The main advantage of trading using opposite NYSE Composite and Cambria Foreign positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Cambria Foreign 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 Foreign will offset losses from the drop in Cambria Foreign's long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| Cambria Foreign vs. Cambria Shareholder Yield | Cambria Foreign vs. Cambria Emerging Shareholder | Cambria Foreign vs. Cambria Global Value | Cambria Foreign vs. Cambria Global Momentum |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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