Correlation Between Cambria Foreign and Invesco Dynamic

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Cambria Foreign and Invesco Dynamic 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 Dynamic 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 Dynamic Food, you can compare the effects of market volatilities on Cambria Foreign and Invesco Dynamic 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 Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambria Foreign and Invesco Dynamic.

Diversification Opportunities for Cambria Foreign and Invesco Dynamic

0.87
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Cambria and Invesco is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Cambria Foreign Shareholder and Invesco Dynamic Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Dynamic Food 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 Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Dynamic Food has no effect on the direction of Cambria Foreign i.e., Cambria Foreign and Invesco Dynamic go up and down completely randomly.

Pair Corralation between Cambria Foreign and Invesco Dynamic

Given the investment horizon of 90 days Cambria Foreign Shareholder is expected to generate 1.21 times more return on investment than Invesco Dynamic. However, Cambria Foreign is 1.21 times more volatile than Invesco Dynamic Food. It trades about 0.03 of its potential returns per unit of risk. Invesco Dynamic Food is currently generating about 0.02 per unit of risk. If you would invest  2,397  in Cambria Foreign Shareholder on December 29, 2023 and sell it today you would earn a total of  297.00  from holding Cambria Foreign Shareholder or generate 12.39% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Cambria Foreign Shareholder  vs.  Invesco Dynamic Food

 Performance 
       Timeline  
Cambria Foreign Shar 

Risk-Adjusted Performance

11 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Cambria Foreign Shareholder are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Cambria Foreign is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.
Invesco Dynamic Food 

Risk-Adjusted Performance

12 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Dynamic Food are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady fundamental drivers, Invesco Dynamic may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Cambria Foreign and Invesco Dynamic Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cambria Foreign and Invesco Dynamic

The main advantage of trading using opposite Cambria Foreign and Invesco Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambria Foreign position performs unexpectedly, Invesco Dynamic 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 Dynamic will offset losses from the drop in Invesco Dynamic's long position.
The idea behind Cambria Foreign Shareholder and Invesco Dynamic Food pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Stocks Directory module to find actively traded stocks across global markets.

Other Complementary Tools

Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Fundamental Analysis
View fundamental data based on most recent published financial statements
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon