Correlation Between Cullen Emerging and Cullen Value
Can any of the company-specific risk be diversified away by investing in both Cullen Emerging and Cullen Value 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 Cullen Emerging and Cullen Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cullen Emerging Markets and Cullen Value Fund, you can compare the effects of market volatilities on Cullen Emerging and Cullen Value 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 Cullen Emerging with a short position of Cullen Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullen Emerging and Cullen Value.
Diversification Opportunities for Cullen Emerging and Cullen Value
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cullen and Cullen is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Cullen Emerging Markets and Cullen Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen Value and Cullen Emerging 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 Cullen Emerging Markets are associated (or correlated) with Cullen Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen Value has no effect on the direction of Cullen Emerging i.e., Cullen Emerging and Cullen Value go up and down completely randomly.
Pair Corralation between Cullen Emerging and Cullen Value
Assuming the 90 days horizon Cullen Emerging Markets is expected to under-perform the Cullen Value. But the mutual fund apears to be less risky and, when comparing its historical volatility, Cullen Emerging Markets is 1.38 times less risky than Cullen Value. The mutual fund trades about -0.15 of its potential returns per unit of risk. The Cullen Value Fund is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,422 in Cullen Value Fund on August 26, 2024 and sell it today you would earn a total of 47.00 from holding Cullen Value Fund or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cullen Emerging Markets vs. Cullen Value Fund
Performance |
| Timeline |
| Cullen Emerging Markets |
| Cullen Value |
Cullen Emerging and Cullen Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cullen Emerging and Cullen Value
The main advantage of trading using opposite Cullen Emerging and Cullen Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullen Emerging position performs unexpectedly, Cullen Value 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 Value will offset losses from the drop in Cullen Value's long position.| Cullen Emerging vs. Cullen Small Cap | Cullen Emerging vs. Cullen Small Cap | Cullen Emerging vs. Cullen Small Cap | Cullen Emerging vs. Cullen Value Fund |
| Cullen Value vs. Cullen Small Cap | Cullen Value vs. Cullen Small Cap | Cullen Value vs. Cullen Small Cap | Cullen Value vs. Cullen Value 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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