Correlation Between Cambria Tail and AGFiQ Market
Can any of the company-specific risk be diversified away by investing in both Cambria Tail and AGFiQ Market 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 Tail and AGFiQ Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambria Tail Risk and AGFiQ Market Neutral, you can compare the effects of market volatilities on Cambria Tail and AGFiQ Market 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 Tail with a short position of AGFiQ Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambria Tail and AGFiQ Market.
Diversification Opportunities for Cambria Tail and AGFiQ Market
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cambria and AGFiQ is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Cambria Tail Risk and AGFiQ Market Neutral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGFiQ Market Neutral and Cambria Tail 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 Tail Risk are associated (or correlated) with AGFiQ Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGFiQ Market Neutral has no effect on the direction of Cambria Tail i.e., Cambria Tail and AGFiQ Market go up and down completely randomly.
Pair Corralation between Cambria Tail and AGFiQ Market
Given the investment horizon of 90 days Cambria Tail Risk is expected to generate 1.05 times more return on investment than AGFiQ Market. However, Cambria Tail is 1.05 times more volatile than AGFiQ Market Neutral. It trades about -0.12 of its potential returns per unit of risk. AGFiQ Market Neutral is currently generating about -0.12 per unit of risk. If you would invest 1,162 in Cambria Tail Risk on August 27, 2024 and sell it today you would lose (23.00) from holding Cambria Tail Risk or give up 1.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambria Tail Risk vs. AGFiQ Market Neutral
Performance |
| Timeline |
| Cambria Tail Risk |
| AGFiQ Market Neutral |
Cambria Tail and AGFiQ Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambria Tail and AGFiQ Market
The main advantage of trading using opposite Cambria Tail and AGFiQ Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambria Tail position performs unexpectedly, AGFiQ Market 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 AGFiQ Market will offset losses from the drop in AGFiQ Market's long position.| Cambria Tail vs. Amplify BlackSwan Growth | Cambria Tail vs. AGFiQ Market Neutral | Cambria Tail vs. Quadratic Interest Rate | Cambria Tail vs. AdvisorShares Dorsey Wright |
| AGFiQ Market vs. Cambria Tail Risk | AGFiQ Market vs. IQ Merger Arbitrage | AGFiQ Market vs. Amplify BlackSwan Growth | AGFiQ Market vs. AdvisorShares Dorsey Wright |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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