Correlation Between Cambria Trinity and Adaptive Alpha
Can any of the company-specific risk be diversified away by investing in both Cambria Trinity and Adaptive Alpha 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 Trinity and Adaptive Alpha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambria Trinity ETF and Adaptive Alpha Opportunities, you can compare the effects of market volatilities on Cambria Trinity and Adaptive Alpha 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 Trinity with a short position of Adaptive Alpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambria Trinity and Adaptive Alpha.
Diversification Opportunities for Cambria Trinity and Adaptive Alpha
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cambria and Adaptive is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Cambria Trinity ETF and Adaptive Alpha Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaptive Alpha Oppor and Cambria Trinity 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 Trinity ETF are associated (or correlated) with Adaptive Alpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaptive Alpha Oppor has no effect on the direction of Cambria Trinity i.e., Cambria Trinity and Adaptive Alpha go up and down completely randomly.
Pair Corralation between Cambria Trinity and Adaptive Alpha
Given the investment horizon of 90 days Cambria Trinity is expected to generate 3.59 times less return on investment than Adaptive Alpha. But when comparing it to its historical volatility, Cambria Trinity ETF is 1.82 times less risky than Adaptive Alpha. It trades about 0.04 of its potential returns per unit of risk. Adaptive Alpha Opportunities is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,651 in Adaptive Alpha Opportunities on September 1, 2024 and sell it today you would earn a total of 304.00 from holding Adaptive Alpha Opportunities or generate 11.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambria Trinity ETF vs. Adaptive Alpha Opportunities
Performance |
| Timeline |
| Cambria Trinity ETF |
| Adaptive Alpha Oppor |
Cambria Trinity and Adaptive Alpha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambria Trinity and Adaptive Alpha
The main advantage of trading using opposite Cambria Trinity and Adaptive Alpha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambria Trinity position performs unexpectedly, Adaptive Alpha 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 Adaptive Alpha will offset losses from the drop in Adaptive Alpha's long position.| Cambria Trinity vs. Cambria Global Asset | Cambria Trinity vs. Cambria Global Value | Cambria Trinity vs. Cambria Foreign Shareholder | Cambria Trinity vs. Cambria Value and |
| Adaptive Alpha vs. Cambria Global Asset | Adaptive Alpha vs. Cambria Global Value | Adaptive Alpha vs. Cambria Foreign Shareholder | Adaptive Alpha 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |