Correlation Between Cullen International and Ep Emerging
Can any of the company-specific risk be diversified away by investing in both Cullen International and Ep 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 International and Ep Emerging 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 Ep Emerging Markets, you can compare the effects of market volatilities on Cullen International and Ep 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 International with a short position of Ep Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullen International and Ep Emerging.
Diversification Opportunities for Cullen International and Ep Emerging
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cullen and EPEIX is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Cullen International High and Ep Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ep Emerging Markets 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 Ep Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ep Emerging Markets has no effect on the direction of Cullen International i.e., Cullen International and Ep Emerging go up and down completely randomly.
Pair Corralation between Cullen International and Ep Emerging
Assuming the 90 days horizon Cullen International High is expected to generate 0.74 times more return on investment than Ep Emerging. However, Cullen International High is 1.35 times less risky than Ep Emerging. It trades about -0.04 of its potential returns per unit of risk. Ep Emerging Markets is currently generating about -0.12 per unit of risk. If you would invest 1,106 in Cullen International High on September 12, 2024 and sell it today you would lose (7.00) from holding Cullen International High or give up 0.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cullen International High vs. Ep Emerging Markets
Performance |
| Timeline |
| Cullen International High |
| Ep Emerging Markets |
Cullen International and Ep Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cullen International and Ep Emerging
The main advantage of trading using opposite Cullen International and Ep Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullen International position performs unexpectedly, Ep 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 Ep Emerging will offset losses from the drop in Ep Emerging's long position.| Cullen International vs. Fidelity Small Cap | Cullen International vs. Ab Discovery Value | Cullen International vs. Vanguard Small Cap Value | Cullen International vs. Palm Valley Capital |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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