Correlation Between IShares Core and Cambria Global

Can any of the company-specific risk be diversified away by investing in both IShares Core and Cambria Global 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 IShares Core and Cambria Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iShares Core Aggressive and Cambria Global Momentum, you can compare the effects of market volatilities on IShares Core and Cambria Global 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 IShares Core with a short position of Cambria Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Cambria Global.

Diversification Opportunities for IShares Core and Cambria Global

-0.23

Correlation Coefficient

IShares Core  Cambria Global

Very good diversification

The 1 month correlation between IShares and Cambria is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core Aggressive and Cambria Global Momentum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Global Momentum and IShares Core 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 iShares Core Aggressive are associated (or correlated) with Cambria Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Global Momentum has no effect on the direction of IShares Core i.e., IShares Core and Cambria Global go up and down completely randomly.

Pair Corralation between IShares Core and Cambria Global

Considering the 90-day investment horizon iShares Core Aggressive is expected to generate 0.7 times more return on investment than Cambria Global. However, iShares Core Aggressive is 1.43 times less risky than Cambria Global. It trades about 0.13 of its potential returns per unit of risk. Cambria Global Momentum is currently generating about 0.06 per unit of risk. If you would invest  6,876  in iShares Core Aggressive on March 22, 2024 and sell it today you would earn a total of  640.83  from holding iShares Core Aggressive or generate 9.32% return on investment over 90 days.

Time Period	1 Month [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.19%
Values	Daily Returns

iShares Core Aggressive  vs.  Cambria Global Momentum

iShares Core Aggressive

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core Aggressive are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, IShares Core is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Cambria Global Momentum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cambria Global Momentum has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with IShares Core and Cambria Global

The main advantage of trading using opposite IShares Core and Cambria Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Cambria Global 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 Cambria Global will offset losses from the drop in Cambria Global's long position.

The idea behind iShares Core Aggressive and Cambria Global Momentum 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.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.