Correlation Between Cambria Value and Aptus Drawdown
Can any of the company-specific risk be diversified away by investing in both Cambria Value and Aptus Drawdown 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 Value and Aptus Drawdown into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambria Value and and Aptus Drawdown Managed, you can compare the effects of market volatilities on Cambria Value and Aptus Drawdown 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 Value with a short position of Aptus Drawdown. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambria Value and Aptus Drawdown.
Diversification Opportunities for Cambria Value and Aptus Drawdown
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cambria and Aptus is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Cambria Value and and Aptus Drawdown Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptus Drawdown Managed and Cambria Value 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 Value and are associated (or correlated) with Aptus Drawdown. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptus Drawdown Managed has no effect on the direction of Cambria Value i.e., Cambria Value and Aptus Drawdown go up and down completely randomly.
Pair Corralation between Cambria Value and Aptus Drawdown
Given the investment horizon of 90 days Cambria Value is expected to generate 1.77 times less return on investment than Aptus Drawdown. In addition to that, Cambria Value is 1.48 times more volatile than Aptus Drawdown Managed. It trades about 0.04 of its total potential returns per unit of risk. Aptus Drawdown Managed is currently generating about 0.1 per unit of volatility. If you would invest 3,482 in Aptus Drawdown Managed on August 23, 2024 and sell it today you would earn a total of 1,263 from holding Aptus Drawdown Managed or generate 36.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambria Value and vs. Aptus Drawdown Managed
Performance |
| Timeline |
| Cambria Value |
| Aptus Drawdown Managed |
Cambria Value and Aptus Drawdown Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambria Value and Aptus Drawdown
The main advantage of trading using opposite Cambria Value and Aptus Drawdown positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambria Value position performs unexpectedly, Aptus Drawdown 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 Aptus Drawdown will offset losses from the drop in Aptus Drawdown's long position.| Cambria Value vs. Aptus Collared Income | Cambria Value vs. Core Alternative ETF | Cambria Value vs. Aptus Drawdown Managed | Cambria Value vs. Amplify BlackSwan Growth |
| Aptus Drawdown vs. Aptus Collared Income | Aptus Drawdown vs. Aptus Defined Risk | Aptus Drawdown vs. Anfield Equity Sector | Aptus Drawdown vs. Opus 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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