While Leicester and Watford have very different ambitions for this season, with the Foxes wanting to get into the top four after a difficult start to the season, while the Hornets want to simply avoid relegation.
Despite their very different aims, the pair are battling it out for the signing of Cambiaso, with TuttoMercatoWeb (via Sport Witness), with the 21-year-old impressing this season.
The Italian is currently playing at left-back for his boyhood club Genoa, with him poised to reach the top, having plenty of potential.
While he has only made his top-flight debut this season, he has quickly made himself first-choice with a number of remarkable performances, with this promotion to the first-team marking a remarkable rise to the top for Cambiaso, who was loaned out to the Italian fourth-tier just three years ago.
According to the report, Cambiaso has 'immediately showed his qualities' at a higher level, and has attracted significant interest in the transfer market.
While Leicester and Watford's interest has not been significant so far, with them only enquiring about the player, since the interest in him is booming, they might be enticed to pursue a move for him.
Despite being originally a left-back, Cambiaso has sifted across several positions this season, with his 12 Serie A appearances being played at left-back or left-wing back or at right-back and even at central midfield.