Correlation Between Cambria Tail and ProShares Short
Can any of the company-specific risk be diversified away by investing in both Cambria Tail and ProShares Short 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 ProShares Short 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 ProShares Short Dow30, you can compare the effects of market volatilities on Cambria Tail and ProShares Short 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 ProShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambria Tail and ProShares Short.
Diversification Opportunities for Cambria Tail and ProShares Short
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cambria and ProShares is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cambria Tail Risk and ProShares Short Dow30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Short Dow30 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 ProShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Short Dow30 has no effect on the direction of Cambria Tail i.e., Cambria Tail and ProShares Short go up and down completely randomly.
Pair Corralation between Cambria Tail and ProShares Short
Given the investment horizon of 90 days Cambria Tail Risk is expected to under-perform the ProShares Short. But the etf apears to be less risky and, when comparing its historical volatility, Cambria Tail Risk is 1.1 times less risky than ProShares Short. The etf trades about -0.05 of its potential returns per unit of risk. The ProShares Short Dow30 is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,667 in ProShares Short Dow30 on November 28, 2024 and sell it today you would lose (57.00) from holding ProShares Short Dow30 or give up 2.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambria Tail Risk vs. ProShares Short Dow30
Performance |
| Timeline |
| Cambria Tail Risk |
| ProShares Short Dow30 |
Cambria Tail and ProShares Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambria Tail and ProShares Short
The main advantage of trading using opposite Cambria Tail and ProShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambria Tail position performs unexpectedly, ProShares Short 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 ProShares Short will offset losses from the drop in ProShares Short'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 |
| ProShares Short vs. ProShares Short QQQ | ProShares Short vs. ProShares Short SP500 | ProShares Short vs. ProShares UltraShort Dow30 | ProShares Short vs. ProShares Short Russell2000 |
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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