Correlation Between Cullen High and Hennessy Balanced
Can any of the company-specific risk be diversified away by investing in both Cullen High and Hennessy Balanced 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 Hennessy Balanced 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 Hennessy Balanced Fund, you can compare the effects of market volatilities on Cullen High and Hennessy Balanced 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 Hennessy Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullen High and Hennessy Balanced.
Diversification Opportunities for Cullen High and Hennessy Balanced
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cullen and Hennessy is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Cullen High Dividend and Hennessy Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Balanced 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 Hennessy Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Balanced has no effect on the direction of Cullen High i.e., Cullen High and Hennessy Balanced go up and down completely randomly.
Pair Corralation between Cullen High and Hennessy Balanced
Assuming the 90 days horizon Cullen High Dividend is expected to generate 1.56 times more return on investment than Hennessy Balanced. However, Cullen High is 1.56 times more volatile than Hennessy Balanced Fund. It trades about 0.1 of its potential returns per unit of risk. Hennessy Balanced Fund is currently generating about 0.1 per unit of risk. If you would invest 1,413 in Cullen High Dividend on September 1, 2024 and sell it today you would earn a total of 113.00 from holding Cullen High Dividend or generate 8.0% 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. Hennessy Balanced Fund
Performance |
| Timeline |
| Cullen High Dividend |
| Hennessy Balanced |
Cullen High and Hennessy Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cullen High and Hennessy Balanced
The main advantage of trading using opposite Cullen High and Hennessy Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullen High position performs unexpectedly, Hennessy Balanced 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 Hennessy Balanced will offset losses from the drop in Hennessy Balanced'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 |
| Hennessy Balanced vs. Hennessy Total Return | Hennessy Balanced vs. Hennessy Nerstone Value | Hennessy Balanced vs. Hennessy Nerstone Growth | Hennessy Balanced vs. Villere Balanced 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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