Correlation Between Cullen Enhanced and Cullen Value
Can any of the company-specific risk be diversified away by investing in both Cullen Enhanced 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 Enhanced 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 Enhanced Equity and Cullen Value Fund, you can compare the effects of market volatilities on Cullen Enhanced 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 Enhanced with a short position of Cullen Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullen Enhanced and Cullen Value.
Diversification Opportunities for Cullen Enhanced and Cullen Value
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cullen and Cullen is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Cullen Enhanced Equity 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 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 Cullen Enhanced Equity 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 Enhanced i.e., Cullen Enhanced and Cullen Value go up and down completely randomly.
Pair Corralation between Cullen Enhanced and Cullen Value
Assuming the 90 days horizon Cullen Enhanced is expected to generate 1.39 times less return on investment than Cullen Value. But when comparing it to its historical volatility, Cullen Enhanced Equity is 1.38 times less risky than Cullen Value. It trades about 0.18 of its potential returns per unit of risk. Cullen Value Fund is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,423 in Cullen Value Fund on August 26, 2024 and sell it today you would earn a total of 46.00 from holding Cullen Value Fund or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cullen Enhanced Equity vs. Cullen Value Fund
Performance |
| Timeline |
| Cullen Enhanced Equity |
| Cullen Value |
Cullen Enhanced and Cullen Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cullen Enhanced and Cullen Value
The main advantage of trading using opposite Cullen Enhanced and Cullen Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullen Enhanced 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 Enhanced vs. Cullen Small Cap | Cullen Enhanced vs. Cullen Small Cap | Cullen Enhanced vs. Cullen Small Cap | Cullen Enhanced vs. Cullen Value Fund |
| Cullen Value vs. Cullen Small Cap | Cullen Value vs. Cullen Small Cap | Cullen Value vs. Cullen Small Cap | Cullen Value vs. Cullen Value 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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