Correlation Between The Arbitrage and Cullen International
Can any of the company-specific risk be diversified away by investing in both The Arbitrage and Cullen International 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 The Arbitrage and Cullen International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Arbitrage Event Driven and Cullen International High, you can compare the effects of market volatilities on The Arbitrage and Cullen International 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 The Arbitrage with a short position of Cullen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Arbitrage and Cullen International.
Diversification Opportunities for The Arbitrage and Cullen International
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between The and Cullen is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding The Arbitrage Event Driven and Cullen International High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen International High and The Arbitrage 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 The Arbitrage Event Driven are associated (or correlated) with Cullen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen International High has no effect on the direction of The Arbitrage i.e., The Arbitrage and Cullen International go up and down completely randomly.
Pair Corralation between The Arbitrage and Cullen International
Assuming the 90 days horizon The Arbitrage Event Driven is expected to generate 0.42 times more return on investment than Cullen International. However, The Arbitrage Event Driven is 2.39 times less risky than Cullen International. It trades about 0.0 of its potential returns per unit of risk. Cullen International High is currently generating about -0.2 per unit of risk. If you would invest 1,174 in The Arbitrage Event Driven on August 30, 2024 and sell it today you would earn a total of 0.00 from holding The Arbitrage Event Driven or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
The Arbitrage Event Driven vs. Cullen International High
Performance |
| Timeline |
| Arbitrage Event |
| Cullen International High |
The Arbitrage and Cullen International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Arbitrage and Cullen International
The main advantage of trading using opposite The Arbitrage and Cullen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Arbitrage position performs unexpectedly, Cullen International 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 Cullen International will offset losses from the drop in Cullen International's long position.| The Arbitrage vs. The Arbitrage Fund | The Arbitrage vs. The Arbitrage Fund | The Arbitrage vs. The Arbitrage Credit | The Arbitrage vs. The Arbitrage Fund |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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