Correlation Between Cullen Emerging and Versatile Bond
Can any of the company-specific risk be diversified away by investing in both Cullen Emerging and Versatile Bond 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 Versatile Bond 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 Versatile Bond Portfolio, you can compare the effects of market volatilities on Cullen Emerging and Versatile Bond 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 Versatile Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullen Emerging and Versatile Bond.
Diversification Opportunities for Cullen Emerging and Versatile Bond
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cullen and Versatile is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Cullen Emerging Markets and Versatile Bond Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Versatile Bond Portfolio 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 Versatile Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Versatile Bond Portfolio has no effect on the direction of Cullen Emerging i.e., Cullen Emerging and Versatile Bond go up and down completely randomly.
Pair Corralation between Cullen Emerging and Versatile Bond
Assuming the 90 days horizon Cullen Emerging Markets is expected to generate 5.3 times more return on investment than Versatile Bond. However, Cullen Emerging is 5.3 times more volatile than Versatile Bond Portfolio. It trades about 0.08 of its potential returns per unit of risk. Versatile Bond Portfolio is currently generating about 0.17 per unit of risk. If you would invest 922.00 in Cullen Emerging Markets on August 30, 2024 and sell it today you would earn a total of 305.00 from holding Cullen Emerging Markets or generate 33.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Cullen Emerging Markets vs. Versatile Bond Portfolio
Performance |
| Timeline |
| Cullen Emerging Markets |
| Versatile Bond Portfolio |
Cullen Emerging and Versatile Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cullen Emerging and Versatile Bond
The main advantage of trading using opposite Cullen Emerging and Versatile Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullen Emerging position performs unexpectedly, Versatile Bond 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 Versatile Bond will offset losses from the drop in Versatile Bond's long position.| Cullen Emerging vs. Angel Oak Financial | Cullen Emerging vs. Rbc Bluebay Global | Cullen Emerging vs. Versatile Bond Portfolio | Cullen Emerging vs. Transamerica Funds |
| Versatile Bond vs. Short Term Treasury Portfolio | Versatile Bond vs. Aggressive Growth Portfolio | Versatile Bond vs. Permanent Portfolio Class | Versatile Bond vs. Thompson Bond 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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