Correlation Between Cambria Foreign and Invesco BulletShares
Can any of the company-specific risk be diversified away by investing in both Cambria Foreign and Invesco BulletShares 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 Foreign and Invesco BulletShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambria Foreign Shareholder and Invesco BulletShares 2024, you can compare the effects of market volatilities on Cambria Foreign and Invesco BulletShares 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 Foreign with a short position of Invesco BulletShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambria Foreign and Invesco BulletShares.
Diversification Opportunities for Cambria Foreign and Invesco BulletShares
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cambria and Invesco is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Cambria Foreign Shareholder and Invesco BulletShares 2024 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco BulletShares 2024 and Cambria Foreign 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 Foreign Shareholder are associated (or correlated) with Invesco BulletShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco BulletShares 2024 has no effect on the direction of Cambria Foreign i.e., Cambria Foreign and Invesco BulletShares go up and down completely randomly.
Pair Corralation between Cambria Foreign and Invesco BulletShares
Given the investment horizon of 90 days Cambria Foreign Shareholder is expected to generate 19.14 times more return on investment than Invesco BulletShares. However, Cambria Foreign is 19.14 times more volatile than Invesco BulletShares 2024. It trades about 0.13 of its potential returns per unit of risk. Invesco BulletShares 2024 is currently generating about 0.56 per unit of risk. If you would invest 2,673 in Cambria Foreign Shareholder on February 11, 2024 and sell it today you would earn a total of 108.00 from holding Cambria Foreign Shareholder or generate 4.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambria Foreign Shareholder vs. Invesco BulletShares 2024
Performance |
| Timeline |
| Cambria Foreign Shar |
| Invesco BulletShares 2024 |
Cambria Foreign and Invesco BulletShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambria Foreign and Invesco BulletShares
The main advantage of trading using opposite Cambria Foreign and Invesco BulletShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambria Foreign position performs unexpectedly, Invesco BulletShares 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 Invesco BulletShares will offset losses from the drop in Invesco BulletShares' long position.| Cambria Foreign vs. WisdomTree Global High | Cambria Foreign vs. WisdomTree International High | Cambria Foreign vs. WisdomTree International LargeCap | Cambria Foreign vs. WisdomTree International Equity |
| Invesco BulletShares vs. Invesco BulletShares 2025 | Invesco BulletShares vs. Invesco BulletShares 2026 | Invesco BulletShares vs. Invesco BulletShares 2027 |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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