Correlation Between Cullen Value and Cullen Emerging
Can any of the company-specific risk be diversified away by investing in both Cullen Value 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 Value 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 Value Fund and Cullen Emerging Markets, you can compare the effects of market volatilities on Cullen Value 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 Value with a short position of Cullen Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullen Value and Cullen Emerging.
Diversification Opportunities for Cullen Value and Cullen Emerging
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cullen and Cullen is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Cullen Value Fund 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 Value 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 Value Fund 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 Value i.e., Cullen Value and Cullen Emerging go up and down completely randomly.
Pair Corralation between Cullen Value and Cullen Emerging
Assuming the 90 days horizon Cullen Value Fund is expected to generate 0.94 times more return on investment than Cullen Emerging. However, Cullen Value Fund is 1.06 times less risky than Cullen Emerging. It trades about 0.11 of its potential returns per unit of risk. Cullen Emerging Markets is currently generating about 0.0 per unit of risk. If you would invest 1,405 in Cullen Value Fund on August 26, 2024 and sell it today you would earn a total of 70.00 from holding Cullen Value Fund or generate 4.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cullen Value Fund vs. Cullen Emerging Markets
Performance |
| Timeline |
| Cullen Value |
| Cullen Emerging Markets |
Cullen Value and Cullen Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cullen Value and Cullen Emerging
The main advantage of trading using opposite Cullen Value and Cullen Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullen Value 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 Value vs. Cullen Small Cap | Cullen Value vs. Cullen Small Cap | Cullen Value vs. Cullen Small Cap | Cullen Value vs. Cullen Value Fund |
| Cullen Emerging vs. Hartford Moderate Allocation | Cullen Emerging vs. Fidelity Managed Retirement | Cullen Emerging vs. Pro Blend Moderate Term | Cullen Emerging vs. Blackrock Moderate Prepared |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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