Correlation Between Cambria Trinity and Cambria Tail
Can any of the company-specific risk be diversified away by investing in both Cambria Trinity and Cambria Tail 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 Cambria Tail 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 Cambria Tail Risk, you can compare the effects of market volatilities on Cambria Trinity and Cambria Tail 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 Cambria Tail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambria Trinity and Cambria Tail.
Diversification Opportunities for Cambria Trinity and Cambria Tail
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cambria and Cambria is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Cambria Trinity ETF and Cambria Tail Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Tail Risk 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 Cambria Tail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Tail Risk has no effect on the direction of Cambria Trinity i.e., Cambria Trinity and Cambria Tail go up and down completely randomly.
Pair Corralation between Cambria Trinity and Cambria Tail
Given the investment horizon of 90 days Cambria Trinity ETF is expected to generate 0.68 times more return on investment than Cambria Tail. However, Cambria Trinity ETF is 1.46 times less risky than Cambria Tail. It trades about 0.04 of its potential returns per unit of risk. Cambria Tail Risk is currently generating about -0.02 per unit of risk. If you would invest 2,548 in Cambria Trinity ETF on September 3, 2024 and sell it today you would earn a total of 82.00 from holding Cambria Trinity ETF or generate 3.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambria Trinity ETF vs. Cambria Tail Risk
Performance |
| Timeline |
| Cambria Trinity ETF |
| Cambria Tail Risk |
Cambria Trinity and Cambria Tail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambria Trinity and Cambria Tail
The main advantage of trading using opposite Cambria Trinity and Cambria Tail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambria Trinity position performs unexpectedly, Cambria Tail 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 Tail will offset losses from the drop in Cambria Tail's long position.| Cambria Trinity vs. Cambria Global Asset | Cambria Trinity vs. Cambria Global Momentum | Cambria Trinity vs. Cambria Emerging Shareholder | Cambria Trinity vs. Cambria Value and |
| Cambria Tail vs. Amplify BlackSwan Growth | Cambria Tail vs. AGFiQ Market Neutral | Cambria Tail vs. Quadratic Interest Rate | Cambria Tail 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 Stocks Directory module to find actively traded stocks across global markets.
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