Correlation Between ARK Space and Cambria Global

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

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

Diversification Opportunities for ARK Space and Cambria Global

0.95

Correlation Coefficient

ARK Space  Cambria Global

Almost no diversification

The 3 months correlation between ARK and Cambria is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding ARK Space Exploration and Cambria Global Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambria Global Value and ARK Space 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 ARK Space Exploration 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 Value has no effect on the direction of ARK Space i.e., ARK Space and Cambria Global go up and down completely randomly.

Pair Corralation between ARK Space and Cambria Global

Given the investment horizon of 90 days ARK Space Exploration is expected to generate 2.77 times more return on investment than Cambria Global. However, ARK Space is 2.77 times more volatile than Cambria Global Value. It trades about 0.31 of its potential returns per unit of risk. Cambria Global Value is currently generating about 0.21 per unit of risk. If you would invest  1,920  in ARK Space Exploration on May 7, 2025 and sell it today you would earn a total of  732.00  from holding ARK Space Exploration or generate 38.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

ARK Space Exploration  vs.  Cambria Global Value

ARK Space Exploration

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ARK Space Exploration are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward-looking signals, ARK Space showed solid returns over the last few months and may actually be approaching a breakup point.

Cambria Global Value

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cambria Global Value are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Cambria Global may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with ARK Space and Cambria Global

The main advantage of trading using opposite ARK Space and Cambria Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARK Space 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 ARK Space Exploration and Cambria Global Value 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.