Correlation Between Cambiar International and Cambiar Opportunity
Can any of the company-specific risk be diversified away by investing in both Cambiar International and Cambiar Opportunity 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 Cambiar International and Cambiar Opportunity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambiar International Equity and Cambiar Opportunity Fund, you can compare the effects of market volatilities on Cambiar International and Cambiar Opportunity 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 Cambiar International with a short position of Cambiar Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambiar International and Cambiar Opportunity.
Diversification Opportunities for Cambiar International and Cambiar Opportunity
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cambiar and Cambiar is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Cambiar International Equity and Cambiar Opportunity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambiar Opportunity and Cambiar International 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 Cambiar International Equity are associated (or correlated) with Cambiar Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambiar Opportunity has no effect on the direction of Cambiar International i.e., Cambiar International and Cambiar Opportunity go up and down completely randomly.
Pair Corralation between Cambiar International and Cambiar Opportunity
Assuming the 90 days horizon Cambiar International Equity is expected to generate 0.88 times more return on investment than Cambiar Opportunity. However, Cambiar International Equity is 1.13 times less risky than Cambiar Opportunity. It trades about -0.06 of its potential returns per unit of risk. Cambiar Opportunity Fund is currently generating about -0.13 per unit of risk. If you would invest 2,559 in Cambiar International Equity on January 30, 2024 and sell it today you would lose (19.00) from holding Cambiar International Equity or give up 0.74% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Cambiar International Equity vs. Cambiar Opportunity Fund
Performance |
Timeline |
Cambiar International |
Cambiar Opportunity |
Cambiar International and Cambiar Opportunity Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cambiar International and Cambiar Opportunity
The main advantage of trading using opposite Cambiar International and Cambiar Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambiar International position performs unexpectedly, Cambiar Opportunity 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 Opportunity will offset losses from the drop in Cambiar Opportunity's long position.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 |
Cambiar Opportunity vs. Cambiar International Equity | Cambiar Opportunity vs. Cambiar Small Cap | Cambiar Opportunity vs. Cambiar Smid Fund | Cambiar Opportunity vs. Cambiar International Equity |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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