Correlation Between Cambria Trinity and Pacer Trendpilot
Can any of the company-specific risk be diversified away by investing in both Cambria Trinity and Pacer Trendpilot 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 Pacer Trendpilot 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 Pacer Trendpilot, you can compare the effects of market volatilities on Cambria Trinity and Pacer Trendpilot 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 Pacer Trendpilot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambria Trinity and Pacer Trendpilot.
Diversification Opportunities for Cambria Trinity and Pacer Trendpilot
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cambria and Pacer is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Cambria Trinity ETF and Pacer Trendpilot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Trendpilot 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 Pacer Trendpilot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Trendpilot has no effect on the direction of Cambria Trinity i.e., Cambria Trinity and Pacer Trendpilot go up and down completely randomly.
Pair Corralation between Cambria Trinity and Pacer Trendpilot
Given the investment horizon of 90 days Cambria Trinity is expected to generate 1.73 times less return on investment than Pacer Trendpilot. But when comparing it to its historical volatility, Cambria Trinity ETF is 1.07 times less risky than Pacer Trendpilot. It trades about 0.07 of its potential returns per unit of risk. Pacer Trendpilot is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,852 in Pacer Trendpilot on August 27, 2024 and sell it today you would earn a total of 537.00 from holding Pacer Trendpilot or generate 18.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambria Trinity ETF vs. Pacer Trendpilot
Performance |
| Timeline |
| Cambria Trinity ETF |
| Pacer Trendpilot |
Cambria Trinity and Pacer Trendpilot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambria Trinity and Pacer Trendpilot
The main advantage of trading using opposite Cambria Trinity and Pacer Trendpilot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambria Trinity position performs unexpectedly, Pacer Trendpilot 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 Pacer Trendpilot will offset losses from the drop in Pacer Trendpilot'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 |
| Pacer Trendpilot vs. Argent Mid Cap | Pacer Trendpilot vs. Calumet Specialty Products | Pacer Trendpilot vs. Loop Industries | Pacer Trendpilot vs. Hurco Companies |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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