Correlation Between Cullen Enhanced and Cullen High
Can any of the company-specific risk be diversified away by investing in both Cullen 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 Cullen 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 Cullen Enhanced Equity and Cullen High Dividend, you can compare the effects of market volatilities on Cullen 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 Cullen Enhanced with a short position of Cullen High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullen Enhanced and Cullen High.
Diversification Opportunities for Cullen Enhanced and Cullen High
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cullen and Cullen is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Cullen Enhanced Equity 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 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 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 Cullen Enhanced i.e., Cullen Enhanced and Cullen High go up and down completely randomly.
Pair Corralation between Cullen Enhanced and Cullen High
Assuming the 90 days horizon Cullen Enhanced is expected to generate 1.12 times less return on investment than Cullen High. But when comparing it to its historical volatility, Cullen Enhanced Equity is 1.02 times less risky than Cullen High. It trades about 0.07 of its potential returns per unit of risk. Cullen High Dividend is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,279 in Cullen High Dividend on September 2, 2024 and sell it today you would earn a total of 249.00 from holding Cullen High Dividend or generate 19.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cullen Enhanced Equity vs. Cullen High Dividend
Performance |
| Timeline |
| Cullen Enhanced Equity |
| Cullen High Dividend |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Cullen Enhanced and Cullen High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cullen Enhanced and Cullen High
The main advantage of trading using opposite Cullen Enhanced and Cullen High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullen 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.| Cullen Enhanced vs. Cullen High Dividend | Cullen Enhanced vs. Dreyfus Global Real | Cullen Enhanced vs. Baron Discovery Fund | Cullen Enhanced vs. Aqr Long Short Equity |
| Cullen High vs. Huber Capital Diversified | Cullen High vs. Pgim Conservative Retirement | Cullen High vs. Oppenheimer International Diversified | Cullen High vs. Western Asset Diversified |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |