Correlation Between Index Plus and Cambiar International
Can any of the company-specific risk be diversified away by investing in both Index Plus and Cambiar International 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 Index Plus and Cambiar International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Index Plus Largecap and Cambiar International Equity, you can compare the effects of market volatilities on Index Plus and Cambiar International 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 Index Plus with a short position of Cambiar International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Index Plus and Cambiar International.
Diversification Opportunities for Index Plus and Cambiar International
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Index and Cambiar is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Index Plus Largecap and Cambiar International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambiar International and Index Plus 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 Index Plus Largecap are associated (or correlated) with Cambiar International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambiar International has no effect on the direction of Index Plus i.e., Index Plus and Cambiar International go up and down completely randomly.
Pair Corralation between Index Plus and Cambiar International
Assuming the 90 days horizon Index Plus Largecap is expected to generate 1.1 times more return on investment than Cambiar International. However, Index Plus is 1.1 times more volatile than Cambiar International Equity. It trades about 0.13 of its potential returns per unit of risk. Cambiar International Equity is currently generating about 0.0 per unit of risk. If you would invest 2,640 in Index Plus Largecap on September 1, 2024 and sell it today you would earn a total of 398.00 from holding Index Plus Largecap or generate 15.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Index Plus Largecap vs. Cambiar International Equity
Performance |
| Timeline |
| Index Plus Largecap |
| Cambiar International |
Index Plus and Cambiar International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Index Plus and Cambiar International
The main advantage of trading using opposite Index Plus and Cambiar International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Index Plus position performs unexpectedly, Cambiar International 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 International will offset losses from the drop in Cambiar International's long position.| Index Plus vs. Virtus Real Estate | Index Plus vs. Deutsche Real Estate | Index Plus vs. Fidelity Real Estate | Index Plus vs. Dunham Real Estate |
| Cambiar International vs. Causeway Emerging Markets | Cambiar International vs. Cambiar Small Cap | Cambiar International vs. Pimco Short Term Fund | Cambiar International vs. Cambiar Opportunity Fund |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Stocks Directory Find actively traded stocks across global markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |