Correlation Between Cullen High and Cullen Emerging
Can any of the company-specific risk be diversified away by investing in both Cullen High and Cullen 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 High and Cullen Emerging 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 Cullen Emerging Markets, you can compare the effects of market volatilities on Cullen High and Cullen 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 High with a short position of Cullen Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullen High and Cullen Emerging.
Diversification Opportunities for Cullen High and Cullen Emerging
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cullen and Cullen is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Cullen High Dividend and Cullen Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen Emerging Markets 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 Cullen Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen Emerging Markets has no effect on the direction of Cullen High i.e., Cullen High and Cullen Emerging go up and down completely randomly.
Pair Corralation between Cullen High and Cullen Emerging
Assuming the 90 days horizon Cullen High is expected to generate 1.12 times less return on investment than Cullen Emerging. But when comparing it to its historical volatility, Cullen High Dividend is 1.2 times less risky than Cullen Emerging. It trades about 0.08 of its potential returns per unit of risk. Cullen Emerging Markets is currently generating about 0.07 of returns per unit of risk over similar time horizon. 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cullen High Dividend vs. Cullen Emerging Markets
Performance |
| Timeline |
| Cullen High Dividend |
| Cullen Emerging Markets |
Cullen High and Cullen Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cullen High and Cullen Emerging
The main advantage of trading using opposite Cullen High and Cullen Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullen High position performs unexpectedly, Cullen 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 Cullen Emerging will offset losses from the drop in Cullen Emerging's long position.| Cullen High vs. The Value Fund | Cullen High vs. Lazard Global Listed | Cullen High vs. Lazard International Strategic | Cullen High vs. Tcw Relative Value |
| Cullen Emerging vs. Johcm Emerging Markets | Cullen Emerging vs. Wasatch Emerging Markets | Cullen Emerging vs. Virtus Emerging Markets | Cullen Emerging vs. Artisan Developing World |
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 Stocks Directory module to find actively traded stocks across global markets.
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