Correlation Between US Treasury and Cambria Global
Can any of the company-specific risk be diversified away by investing in both US Treasury 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 US Treasury and Cambria Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Treasury 12 and Cambria Global Value, you can compare the effects of market volatilities on US Treasury 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 US Treasury with a short position of Cambria Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Treasury and Cambria Global.
Diversification Opportunities for US Treasury and Cambria Global
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between OBIL and Cambria is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding US Treasury 12 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 US Treasury 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 US Treasury 12 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 US Treasury i.e., US Treasury and Cambria Global go up and down completely randomly.
Pair Corralation between US Treasury and Cambria Global
Given the investment horizon of 90 days US Treasury is expected to generate 3.17 times less return on investment than Cambria Global. But when comparing it to its historical volatility, US Treasury 12 is 19.3 times less risky than Cambria Global. It trades about 0.43 of its potential returns per unit of risk. Cambria Global Value is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,939 in Cambria Global Value on November 5, 2024 and sell it today you would earn a total of 291.00 from holding Cambria Global Value or generate 15.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
US Treasury 12 vs. Cambria Global Value
Performance |
| Timeline |
| US Treasury 12 |
| Cambria Global Value |
US Treasury and Cambria Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Treasury and Cambria Global
The main advantage of trading using opposite US Treasury and Cambria Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Treasury 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.| US Treasury vs. Rbb Fund | US Treasury vs. Rbb Fund | US Treasury vs. Rbb Fund | US Treasury vs. US Treasury 6 |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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