Correlation Between Cullen High and American Mutual
Can any of the company-specific risk be diversified away by investing in both Cullen High and American Mutual 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 High and American Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cullen High Dividend and American Mutual Fund, you can compare the effects of market volatilities on Cullen High and American Mutual 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 High with a short position of American Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullen High and American Mutual.
Diversification Opportunities for Cullen High and American Mutual
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cullen and American is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Cullen High Dividend and American Mutual Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Mutual and Cullen High 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 High Dividend are associated (or correlated) with American Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Mutual has no effect on the direction of Cullen High i.e., Cullen High and American Mutual go up and down completely randomly.
Pair Corralation between Cullen High and American Mutual
Assuming the 90 days horizon Cullen High is expected to generate 1.65 times less return on investment than American Mutual. In addition to that, Cullen High is 1.13 times more volatile than American Mutual Fund. It trades about 0.05 of its total potential returns per unit of risk. American Mutual Fund is currently generating about 0.09 per unit of volatility. If you would invest 4,702 in American Mutual Fund on September 3, 2024 and sell it today you would earn a total of 1,356 from holding American Mutual Fund or generate 28.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cullen High Dividend vs. American Mutual Fund
Performance |
| Timeline |
| Cullen High Dividend |
| American Mutual |
Cullen High and American Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cullen High and American Mutual
The main advantage of trading using opposite Cullen High and American Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullen High position performs unexpectedly, American Mutual 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 American Mutual will offset losses from the drop in American Mutual's long position.| Cullen High vs. Dodge Cox Stock | Cullen High vs. American Funds American | Cullen High vs. American Funds American | Cullen High vs. American Mutual Fund |
| American Mutual vs. Dodge Cox Stock | American Mutual vs. American Funds American | American Mutual vs. American Funds American | American Mutual vs. American Mutual 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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