Correlation Between Alpha Architect and Cambria Emerging
Can any of the company-specific risk be diversified away by investing in both Alpha Architect and Cambria Emerging 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 Alpha Architect and Cambria Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha Architect Quantitative and Cambria Emerging Shareholder, you can compare the effects of market volatilities on Alpha Architect and Cambria Emerging 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 Alpha Architect with a short position of Cambria Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Architect and Cambria Emerging.
Diversification Opportunities for Alpha Architect and Cambria Emerging
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alpha and Cambria is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Architect Quantitative and Cambria Emerging Shareholder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Emerging Sha and Alpha Architect 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 Alpha Architect Quantitative are associated (or correlated) with Cambria Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Emerging Sha has no effect on the direction of Alpha Architect i.e., Alpha Architect and Cambria Emerging go up and down completely randomly.
Pair Corralation between Alpha Architect and Cambria Emerging
Given the investment horizon of 90 days Alpha Architect Quantitative is expected to generate 0.92 times more return on investment than Cambria Emerging. However, Alpha Architect Quantitative is 1.09 times less risky than Cambria Emerging. It trades about 0.33 of its potential returns per unit of risk. Cambria Emerging Shareholder is currently generating about -0.06 per unit of risk. If you would invest 4,459 in Alpha Architect Quantitative on September 1, 2024 and sell it today you would earn a total of 300.00 from holding Alpha Architect Quantitative or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alpha Architect Quantitative vs. Cambria Emerging Shareholder
Performance |
| Timeline |
| Alpha Architect Quan |
| Cambria Emerging Sha |
Alpha Architect and Cambria Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alpha Architect and Cambria Emerging
The main advantage of trading using opposite Alpha Architect and Cambria Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Architect position performs unexpectedly, Cambria Emerging 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 Emerging will offset losses from the drop in Cambria Emerging's long position.| Alpha Architect vs. Alpha Architect International | Alpha Architect vs. Alpha Architect Quantitative | Alpha Architect vs. Alpha Architect International | Alpha Architect vs. Alpha Architect Value |
| Cambria Emerging vs. Cambria Foreign Shareholder | Cambria Emerging vs. Cambria Global Value | Cambria Emerging vs. Cambria Global Momentum | Cambria Emerging vs. Cambria Value and |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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