Correlation Between Affinity World and Cambiar Aggressive
Can any of the company-specific risk be diversified away by investing in both Affinity World and Cambiar Aggressive 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 Affinity World and Cambiar Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affinity World Leaders and Cambiar Aggressive Value, you can compare the effects of market volatilities on Affinity World and Cambiar Aggressive 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 Affinity World with a short position of Cambiar Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affinity World and Cambiar Aggressive.
Diversification Opportunities for Affinity World and Cambiar Aggressive
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Affinity and Cambiar is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Affinity World Leaders and Cambiar Aggressive Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambiar Aggressive Value and Affinity World 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 Affinity World Leaders are associated (or correlated) with Cambiar Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambiar Aggressive Value has no effect on the direction of Affinity World i.e., Affinity World and Cambiar Aggressive go up and down completely randomly.
Pair Corralation between Affinity World and Cambiar Aggressive
Given the investment horizon of 90 days Affinity World Leaders is expected to generate 1.06 times more return on investment than Cambiar Aggressive. However, Affinity World is 1.06 times more volatile than Cambiar Aggressive Value. It trades about 0.1 of its potential returns per unit of risk. Cambiar Aggressive Value is currently generating about 0.07 per unit of risk. If you would invest 2,380 in Affinity World Leaders on September 3, 2024 and sell it today you would earn a total of 1,114 from holding Affinity World Leaders or generate 46.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.58% |
| Values | Daily Returns |
Affinity World Leaders vs. Cambiar Aggressive Value
Performance |
| Timeline |
| Affinity World Leaders |
| Cambiar Aggressive Value |
Affinity World and Cambiar Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affinity World and Cambiar Aggressive
The main advantage of trading using opposite Affinity World and Cambiar Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affinity World position performs unexpectedly, Cambiar Aggressive 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 Aggressive will offset losses from the drop in Cambiar Aggressive's long position.| Affinity World vs. FCF International Quality | Affinity World vs. American Century STOXX | Affinity World vs. PIMCO RAFI Dynamic | Affinity World vs. ProShares SP 500 |
| Cambiar Aggressive vs. Horizon Kinetics Inflation | Cambiar Aggressive vs. Simplify Exchange Traded | Cambiar Aggressive vs. iMGP DBi Managed | Cambiar Aggressive vs. Quadratic Interest Rate |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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