Correlation Between Profunds Ultrashort and Cambiar Smid
Can any of the company-specific risk be diversified away by investing in both Profunds Ultrashort and Cambiar Smid 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 Profunds Ultrashort and Cambiar Smid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Profunds Ultrashort Nasdaq 100 and Cambiar Smid Fund, you can compare the effects of market volatilities on Profunds Ultrashort and Cambiar Smid 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 Profunds Ultrashort with a short position of Cambiar Smid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profunds Ultrashort and Cambiar Smid.
Diversification Opportunities for Profunds Ultrashort and Cambiar Smid
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Profunds and Cambiar is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Profunds Ultrashort Nasdaq 100 and Cambiar Smid Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambiar Smid and Profunds Ultrashort 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 Profunds Ultrashort Nasdaq 100 are associated (or correlated) with Cambiar Smid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambiar Smid has no effect on the direction of Profunds Ultrashort i.e., Profunds Ultrashort and Cambiar Smid go up and down completely randomly.
Pair Corralation between Profunds Ultrashort and Cambiar Smid
Assuming the 90 days horizon Profunds Ultrashort Nasdaq 100 is expected to under-perform the Cambiar Smid. In addition to that, Profunds Ultrashort is 2.98 times more volatile than Cambiar Smid Fund. It trades about -0.06 of its total potential returns per unit of risk. Cambiar Smid Fund is currently generating about 0.09 per unit of volatility. If you would invest 2,368 in Cambiar Smid Fund on September 1, 2024 and sell it today you would earn a total of 218.00 from holding Cambiar Smid Fund or generate 9.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Profunds Ultrashort Nasdaq 100 vs. Cambiar Smid Fund
Performance |
| Timeline |
| Profunds Ultrashort |
| Cambiar Smid |
Profunds Ultrashort and Cambiar Smid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Profunds Ultrashort and Cambiar Smid
The main advantage of trading using opposite Profunds Ultrashort and Cambiar Smid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profunds Ultrashort position performs unexpectedly, Cambiar Smid 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 Smid will offset losses from the drop in Cambiar Smid's long position.| Profunds Ultrashort vs. James Balanced Golden | Profunds Ultrashort vs. Franklin Gold Precious | Profunds Ultrashort vs. Gamco Global Gold | Profunds Ultrashort vs. Gabelli Gold Fund |
| Cambiar Smid vs. Cambiar International Equity | Cambiar Smid vs. Cambiar Small Cap | Cambiar Smid vs. Cambiar Opportunity Fund | Cambiar Smid vs. Cambiar Small Cap |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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