Correlation Between Cabana Target and Cambria Trinity
Can any of the company-specific risk be diversified away by investing in both Cabana Target and Cambria Trinity 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 Cambria Trinity 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 Cambria Trinity ETF, you can compare the effects of market volatilities on Cabana Target and Cambria Trinity 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 Cambria Trinity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cabana Target and Cambria Trinity.
Diversification Opportunities for Cabana Target and Cambria Trinity
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cabana and Cambria is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Cabana Target Drawdown and Cambria Trinity ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Trinity ETF 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 Cambria Trinity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Trinity ETF has no effect on the direction of Cabana Target i.e., Cabana Target and Cambria Trinity go up and down completely randomly.
Pair Corralation between Cabana Target and Cambria Trinity
Given the investment horizon of 90 days Cabana Target Drawdown is expected to generate 1.12 times more return on investment than Cambria Trinity. However, Cabana Target is 1.12 times more volatile than Cambria Trinity ETF. It trades about 0.22 of its potential returns per unit of risk. Cambria Trinity ETF is currently generating about 0.14 per unit of risk. If you would invest 2,525 in Cabana Target Drawdown on August 30, 2024 and sell it today you would earn a total of 67.00 from holding Cabana Target Drawdown or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Cabana Target Drawdown vs. Cambria Trinity ETF
Performance |
| Timeline |
| Cabana Target Drawdown |
| Cambria Trinity ETF |
Cabana Target and Cambria Trinity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cabana Target and Cambria Trinity
The main advantage of trading using opposite Cabana Target and Cambria Trinity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cabana Target position performs unexpectedly, Cambria Trinity 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 Trinity will offset losses from the drop in Cambria Trinity's long position.| Cabana Target vs. Tech Central | Cabana Target vs. Global X PropTech | Cabana Target vs. TransAct Technologies Incorporated | Cabana Target vs. 1st Source |
| Cambria Trinity vs. Cambria Global Asset | Cambria Trinity vs. Cambria Global Momentum | Cambria Trinity vs. Cambria Emerging Shareholder | Cambria Trinity 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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