Correlation Between IShares Broad and Cambiar Aggressive
Can any of the company-specific risk be diversified away by investing in both IShares Broad and Cambiar Aggressive 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 IShares Broad and Cambiar Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Broad USD and Cambiar Aggressive Value, you can compare the effects of market volatilities on IShares Broad and Cambiar Aggressive 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 IShares Broad with a short position of Cambiar Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Broad and Cambiar Aggressive.
Diversification Opportunities for IShares Broad and Cambiar Aggressive
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and Cambiar is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding iShares Broad USD and Cambiar Aggressive Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambiar Aggressive Value and IShares Broad 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 iShares Broad USD are associated (or correlated) with Cambiar Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambiar Aggressive Value has no effect on the direction of IShares Broad i.e., IShares Broad and Cambiar Aggressive go up and down completely randomly.
Pair Corralation between IShares Broad and Cambiar Aggressive
Given the investment horizon of 90 days IShares Broad is expected to generate 3.02 times less return on investment than Cambiar Aggressive. But when comparing it to its historical volatility, iShares Broad USD is 1.9 times less risky than Cambiar Aggressive. It trades about 0.05 of its potential returns per unit of risk. Cambiar Aggressive Value is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,405 in Cambiar Aggressive Value on September 3, 2024 and sell it today you would earn a total of 687.00 from holding Cambiar Aggressive Value or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.58% |
| Values | Daily Returns |
iShares Broad USD vs. Cambiar Aggressive Value
Performance |
| Timeline |
| iShares Broad USD |
| Cambiar Aggressive Value |
IShares Broad and Cambiar Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Broad and Cambiar Aggressive
The main advantage of trading using opposite IShares Broad and Cambiar Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Broad position performs unexpectedly, Cambiar Aggressive 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 Cambiar Aggressive will offset losses from the drop in Cambiar Aggressive's long position.| IShares Broad vs. iShares 5 10 Year | IShares Broad vs. iShares Broad USD | IShares Broad vs. iShares 1 5 Year | IShares Broad vs. iShares 0 5 Year |
| Cambiar Aggressive vs. Horizon Kinetics Inflation | Cambiar Aggressive vs. Simplify Exchange Traded | Cambiar Aggressive vs. iMGP DBi Managed | Cambiar Aggressive vs. Quadratic Interest Rate |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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