Correlation Between SPDR SP and Cambria Micro
Can any of the company-specific risk be diversified away by investing in both SPDR SP 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 SPDR SP and Cambria Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP 600 and Cambria Micro And, you can compare the effects of market volatilities on SPDR SP 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 SPDR SP with a short position of Cambria Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Cambria Micro.
Diversification Opportunities for SPDR SP and Cambria Micro
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Cambria is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 600 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 SPDR SP 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 SPDR SP 600 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 SPDR SP i.e., SPDR SP and Cambria Micro go up and down completely randomly.
Pair Corralation between SPDR SP and Cambria Micro
Given the investment horizon of 90 days SPDR SP 600 is expected to generate 1.01 times more return on investment than Cambria Micro. However, SPDR SP is 1.01 times more volatile than Cambria Micro And. It trades about 0.09 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 8,862 in SPDR SP 600 on October 26, 2024 and sell it today you would earn a total of 130.00 from holding SPDR SP 600 or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP 600 vs. Cambria Micro And
Performance |
| Timeline |
| SPDR SP 600 |
| Cambria Micro And |
SPDR SP and Cambria Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Cambria Micro
The main advantage of trading using opposite SPDR SP and Cambria Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP 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.| SPDR SP vs. Dimensional ETF Trust | SPDR SP vs. Vanguard Small Cap Index | SPDR SP vs. First Trust Multi Manager | SPDR SP vs. Vanguard SP Small Cap |
| 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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