Correlation Between Enhanced and Cullen High
Can any of the company-specific risk be diversified away by investing in both Enhanced and Cullen High 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 Enhanced and Cullen High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enhanced Large Pany and Cullen High Dividend, you can compare the effects of market volatilities on Enhanced and Cullen High 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 Enhanced with a short position of Cullen High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enhanced and Cullen High.
Diversification Opportunities for Enhanced and Cullen High
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enhanced and Cullen is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Enhanced Large Pany and Cullen High Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen High Dividend and Enhanced 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 Enhanced Large Pany are associated (or correlated) with Cullen High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen High Dividend has no effect on the direction of Enhanced i.e., Enhanced and Cullen High go up and down completely randomly.
Pair Corralation between Enhanced and Cullen High
Assuming the 90 days horizon Enhanced Large Pany is expected to generate 1.37 times more return on investment than Cullen High. However, Enhanced is 1.37 times more volatile than Cullen High Dividend. It trades about 0.12 of its potential returns per unit of risk. Cullen High Dividend is currently generating about 0.09 per unit of risk. If you would invest 1,380 in Enhanced Large Pany on September 3, 2024 and sell it today you would earn a total of 185.00 from holding Enhanced Large Pany or generate 13.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enhanced Large Pany vs. Cullen High Dividend
Performance |
| Timeline |
| Enhanced Large Pany |
| Cullen High Dividend |
Enhanced and Cullen High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enhanced and Cullen High
The main advantage of trading using opposite Enhanced and Cullen High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enhanced position performs unexpectedly, Cullen High 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 High will offset losses from the drop in Cullen High's long position.| Enhanced vs. Us Micro Cap | Enhanced vs. Dfa Short Term Government | Enhanced vs. Emerging Markets Small | Enhanced vs. Dfa One Year Fixed |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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