Correlation Between Cullen Enhanced and Nebraska Municipal
Can any of the company-specific risk be diversified away by investing in both Cullen Enhanced and Nebraska Municipal 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 Nebraska Municipal 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 Nebraska Municipal Fund, you can compare the effects of market volatilities on Cullen Enhanced and Nebraska Municipal 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 Nebraska Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullen Enhanced and Nebraska Municipal.
Diversification Opportunities for Cullen Enhanced and Nebraska Municipal
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cullen and Nebraska is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Cullen Enhanced Equity and Nebraska Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nebraska Municipal 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 Nebraska Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nebraska Municipal has no effect on the direction of Cullen Enhanced i.e., Cullen Enhanced and Nebraska Municipal go up and down completely randomly.
Pair Corralation between Cullen Enhanced and Nebraska Municipal
Assuming the 90 days horizon Cullen Enhanced Equity is expected to generate 2.67 times more return on investment than Nebraska Municipal. However, Cullen Enhanced is 2.67 times more volatile than Nebraska Municipal Fund. It trades about 0.07 of its potential returns per unit of risk. Nebraska Municipal Fund is currently generating about 0.05 per unit of risk. If you would invest 957.00 in Cullen Enhanced Equity on September 2, 2024 and sell it today you would earn a total of 147.00 from holding Cullen Enhanced Equity or generate 15.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cullen Enhanced Equity vs. Nebraska Municipal Fund
Performance |
| Timeline |
| Cullen Enhanced Equity |
| Nebraska Municipal |
Cullen Enhanced and Nebraska Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cullen Enhanced and Nebraska Municipal
The main advantage of trading using opposite Cullen Enhanced and Nebraska Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullen Enhanced position performs unexpectedly, Nebraska Municipal 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 Nebraska Municipal will offset losses from the drop in Nebraska Municipal's long position.| Cullen Enhanced vs. Rbc Emerging Markets | Cullen Enhanced vs. Western Asset Diversified | Cullen Enhanced vs. Ep Emerging Markets | Cullen Enhanced vs. Siit Emerging Markets |
| Nebraska Municipal vs. Us Vector Equity | Nebraska Municipal vs. Scharf Fund Retail | Nebraska Municipal vs. Huber Capital Equity | Nebraska Municipal vs. Locorr Dynamic Equity |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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