Correlation Between Cambria Value and Cambria Global
Can any of the company-specific risk be diversified away by investing in both Cambria Value and Cambria Global 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 Cambria Global 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 Cambria Global Asset, you can compare the effects of market volatilities on Cambria Value and Cambria Global 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 Cambria Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambria Value and Cambria Global.
Diversification Opportunities for Cambria Value and Cambria Global
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cambria and Cambria is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Cambria Value and and Cambria Global Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Global Asset 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 Cambria Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Global Asset has no effect on the direction of Cambria Value i.e., Cambria Value and Cambria Global go up and down completely randomly.
Pair Corralation between Cambria Value and Cambria Global
Given the investment horizon of 90 days Cambria Value and is expected to generate 1.4 times more return on investment than Cambria Global. However, Cambria Value is 1.4 times more volatile than Cambria Global Asset. It trades about 0.05 of its potential returns per unit of risk. Cambria Global Asset is currently generating about 0.05 per unit of risk. If you would invest 2,681 in Cambria Value and on August 28, 2024 and sell it today you would earn a total of 576.00 from holding Cambria Value and or generate 21.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambria Value and vs. Cambria Global Asset
Performance |
| Timeline |
| Cambria Value |
| Cambria Global Asset |
Cambria Value and Cambria Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambria Value and Cambria Global
The main advantage of trading using opposite Cambria Value and Cambria Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambria Value position performs unexpectedly, Cambria Global 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 Global will offset losses from the drop in Cambria Global's long position.| Cambria Value vs. WisdomTree 9060 Balanced | Cambria Value vs. RPAR Risk Parity | Cambria Value vs. Cambria Tail Risk | Cambria Value vs. Aptus Defined Risk |
| Cambria Global vs. Cambria Global Momentum | Cambria Global vs. Cambria Global Value | Cambria Global vs. Cambria Foreign Shareholder | Cambria Global vs. Cambria Trinity ETF |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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