Correlation Between AdvisorShares and Cambria Tail

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

By analyzing existing cross correlation between AdvisorShares and Cambria Tail Risk, you can compare the effects of market volatilities on AdvisorShares and Cambria Tail 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 AdvisorShares with a short position of Cambria Tail. Check out your portfolio center. Please also check ongoing floating volatility patterns of AdvisorShares and Cambria Tail.

Diversification Opportunities for AdvisorShares and Cambria Tail

-0.88

Correlation Coefficient

AdvisorShares  Cambria Tail

Pay attention - limited upside

The 3 months correlation between AdvisorShares and Cambria is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding AdvisorShares and Cambria Tail Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Tail Risk and AdvisorShares 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 AdvisorShares are associated (or correlated) with Cambria Tail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambria Tail Risk has no effect on the direction of AdvisorShares i.e., AdvisorShares and Cambria Tail go up and down completely randomly.

Pair Corralation between AdvisorShares and Cambria Tail

If you would invest  3,284  in AdvisorShares on September 3, 2024 and sell it today you would earn a total of  0.00  from holding AdvisorShares or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

AdvisorShares  vs.  Cambria Tail Risk

AdvisorShares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AdvisorShares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, AdvisorShares is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Cambria Tail Risk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cambria Tail Risk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Etf's forward indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the ETF venture institutional investors.

Pair Trading with AdvisorShares and Cambria Tail

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

The idea behind AdvisorShares and Cambria Tail Risk 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.