Correlation Between Cullen Emerging and Johcm Emerging
Can any of the company-specific risk be diversified away by investing in both Cullen Emerging and Johcm Emerging 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 Johcm Emerging 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 Johcm Emerging Markets, you can compare the effects of market volatilities on Cullen Emerging and Johcm Emerging 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 Johcm Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullen Emerging and Johcm Emerging.
Diversification Opportunities for Cullen Emerging and Johcm Emerging
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cullen and Johcm is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Cullen Emerging Markets and Johcm Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johcm Emerging Markets 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 Johcm Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johcm Emerging Markets has no effect on the direction of Cullen Emerging i.e., Cullen Emerging and Johcm Emerging go up and down completely randomly.
Pair Corralation between Cullen Emerging and Johcm Emerging
Assuming the 90 days horizon Cullen Emerging Markets is expected to generate 0.87 times more return on investment than Johcm Emerging. However, Cullen Emerging Markets is 1.14 times less risky than Johcm Emerging. It trades about 0.07 of its potential returns per unit of risk. Johcm Emerging Markets is currently generating about 0.03 per unit of risk. If you would invest 1,028 in Cullen Emerging Markets on September 2, 2024 and sell it today you would earn a total of 219.00 from holding Cullen Emerging Markets or generate 21.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cullen Emerging Markets vs. Johcm Emerging Markets
Performance |
| Timeline |
| Cullen Emerging Markets |
| Johcm Emerging Markets |
Cullen Emerging and Johcm Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cullen Emerging and Johcm Emerging
The main advantage of trading using opposite Cullen Emerging and Johcm Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullen Emerging position performs unexpectedly, Johcm Emerging 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 Johcm Emerging will offset losses from the drop in Johcm Emerging's long position.| Cullen Emerging vs. Johcm Emerging Markets | Cullen Emerging vs. Wasatch Emerging Markets | Cullen Emerging vs. Virtus Emerging Markets | Cullen Emerging vs. Artisan Developing World |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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