Correlation Between Cabana Target and AltShares Event
Can any of the company-specific risk be diversified away by investing in both Cabana Target and AltShares Event 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 Cabana Target and AltShares Event into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cabana Target Drawdown and AltShares Event Driven ETF, you can compare the effects of market volatilities on Cabana Target and AltShares Event 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 Cabana Target with a short position of AltShares Event. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cabana Target and AltShares Event.
Diversification Opportunities for Cabana Target and AltShares Event
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cabana and AltShares is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Cabana Target Drawdown and AltShares Event Driven ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AltShares Event Driven and Cabana Target 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 Cabana Target Drawdown are associated (or correlated) with AltShares Event. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AltShares Event Driven has no effect on the direction of Cabana Target i.e., Cabana Target and AltShares Event go up and down completely randomly.
Pair Corralation between Cabana Target and AltShares Event
Given the investment horizon of 90 days Cabana Target is expected to generate 1.0 times less return on investment than AltShares Event. In addition to that, Cabana Target is 1.44 times more volatile than AltShares Event Driven ETF. It trades about 0.12 of its total potential returns per unit of risk. AltShares Event Driven ETF is currently generating about 0.17 per unit of volatility. If you would invest 986.00 in AltShares Event Driven ETF on September 1, 2024 and sell it today you would earn a total of 91.00 from holding AltShares Event Driven ETF or generate 9.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Cabana Target Drawdown vs. AltShares Event Driven ETF
Performance |
| Timeline |
| Cabana Target Drawdown |
| AltShares Event Driven |
Cabana Target and AltShares Event Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cabana Target and AltShares Event
The main advantage of trading using opposite Cabana Target and AltShares Event positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cabana Target position performs unexpectedly, AltShares Event 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 AltShares Event will offset losses from the drop in AltShares Event's long position.| Cabana Target vs. Cambria Global Asset | Cabana Target vs. Cambria Global Value | Cabana Target vs. Cambria Foreign Shareholder | Cabana Target vs. Cambria Value and |
| AltShares Event vs. First Trust Managed | AltShares Event vs. Franklin Liberty Systematic | AltShares Event vs. Overlay Shares Foreign | AltShares Event vs. First Trust LongShort |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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