Correlation Between Cambria Value and Manager Directed
Can any of the company-specific risk be diversified away by investing in both Cambria Value and Manager Directed 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 Manager Directed 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 Manager Directed Portfolios, you can compare the effects of market volatilities on Cambria Value and Manager Directed 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 Manager Directed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambria Value and Manager Directed.
Diversification Opportunities for Cambria Value and Manager Directed
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cambria and Manager is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Cambria Value and and Manager Directed Portfolios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manager Directed Por 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 Manager Directed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manager Directed Por has no effect on the direction of Cambria Value i.e., Cambria Value and Manager Directed go up and down completely randomly.
Pair Corralation between Cambria Value and Manager Directed
Given the investment horizon of 90 days Cambria Value and is expected to generate 21.82 times more return on investment than Manager Directed. However, Cambria Value is 21.82 times more volatile than Manager Directed Portfolios. It trades about 0.3 of its potential returns per unit of risk. Manager Directed Portfolios is currently generating about 0.33 per unit of risk. If you would invest 2,974 in Cambria Value and on September 4, 2024 and sell it today you would earn a total of 245.00 from holding Cambria Value and or generate 8.24% 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. Manager Directed Portfolios
Performance |
| Timeline |
| Cambria Value |
| Manager Directed Por |
Cambria Value and Manager Directed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambria Value and Manager Directed
The main advantage of trading using opposite Cambria Value and Manager Directed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambria Value position performs unexpectedly, Manager Directed 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 Manager Directed will offset losses from the drop in Manager Directed's long position.| Cambria Value vs. Cambria Global Momentum | Cambria Value vs. Cambria Emerging Shareholder | Cambria Value vs. Cambria Shareholder Yield | Cambria Value vs. Cambria Foreign Shareholder |
| Manager Directed vs. Core Alternative ETF | Manager Directed vs. Aptus Drawdown Managed | Manager Directed vs. Swan Hedged Equity | Manager Directed vs. Cambria Value and |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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