Correlation Between Cullen International and Cullen Value
Can any of the company-specific risk be diversified away by investing in both Cullen International and Cullen Value 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 International and Cullen Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cullen International High and Cullen Value Fund, you can compare the effects of market volatilities on Cullen International and Cullen Value 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 International with a short position of Cullen Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullen International and Cullen Value.
Diversification Opportunities for Cullen International and Cullen Value
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cullen and Cullen is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cullen International High and Cullen Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen Value and Cullen International 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 International High are associated (or correlated) with Cullen Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen Value has no effect on the direction of Cullen International i.e., Cullen International and Cullen Value go up and down completely randomly.
Pair Corralation between Cullen International and Cullen Value
Assuming the 90 days horizon Cullen International is expected to generate 1.45 times less return on investment than Cullen Value. In addition to that, Cullen International is 1.04 times more volatile than Cullen Value Fund. It trades about 0.05 of its total potential returns per unit of risk. Cullen Value Fund is currently generating about 0.08 per unit of volatility. If you would invest 1,214 in Cullen Value Fund on September 2, 2024 and sell it today you would earn a total of 266.00 from holding Cullen Value Fund or generate 21.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cullen International High vs. Cullen Value Fund
Performance |
| Timeline |
| Cullen International High |
| Cullen Value |
Cullen International and Cullen Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cullen International and Cullen Value
The main advantage of trading using opposite Cullen International and Cullen Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullen International position performs unexpectedly, Cullen Value 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 Value will offset losses from the drop in Cullen Value's long position.| Cullen International vs. Cullen Small Cap | Cullen International vs. Cullen Small Cap | Cullen International vs. Cullen Small Cap | Cullen International vs. Cullen Value Fund |
| Cullen Value vs. Strategic Allocation Aggressive | Cullen Value vs. Aqr Large Cap | Cullen Value vs. Alternative Asset Allocation | Cullen Value vs. Principal Lifetime Hybrid |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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