Correlation Between Investment Managers and Cambria Global
Can any of the company-specific risk be diversified away by investing in both Investment Managers 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 Investment Managers and Cambria Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investment Managers Series and Cambria Global Asset, you can compare the effects of market volatilities on Investment Managers 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 Investment Managers with a short position of Cambria Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investment Managers and Cambria Global.
Diversification Opportunities for Investment Managers and Cambria Global
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Investment and Cambria is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Investment Managers Series and Cambria Global Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Global Asset and Investment Managers 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 Investment Managers Series 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 Asset has no effect on the direction of Investment Managers i.e., Investment Managers and Cambria Global go up and down completely randomly.
Pair Corralation between Investment Managers and Cambria Global
Considering the 90-day investment horizon Investment Managers Series is expected to generate 1.17 times more return on investment than Cambria Global. However, Investment Managers is 1.17 times more volatile than Cambria Global Asset. It trades about 0.32 of its potential returns per unit of risk. Cambria Global Asset is currently generating about 0.11 per unit of risk. If you would invest 2,697 in Investment Managers Series on January 20, 2024 and sell it today you would earn a total of 399.00 from holding Investment Managers Series or generate 14.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Investment Managers Series vs. Cambria Global Asset
Performance |
Timeline |
Investment Managers |
Cambria Global Asset |
Investment Managers and Cambria Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Investment Managers and Cambria Global
The main advantage of trading using opposite Investment Managers and Cambria Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investment Managers 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.Investment Managers vs. First Trust BuyWrite | Investment Managers vs. First Trust Emerging | Investment Managers vs. First Trust SSI | Investment Managers vs. First Trust Alternative |
Cambria Global vs. First Trust BuyWrite | Cambria Global vs. First Trust Emerging | Cambria Global vs. First Trust SSI | Cambria Global vs. First Trust Alternative |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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