Correlation Between Falcon Focus and Cullen Enhanced
Can any of the company-specific risk be diversified away by investing in both Falcon Focus and Cullen Enhanced 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 Falcon Focus and Cullen Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falcon Focus Scv and Cullen Enhanced Equity, you can compare the effects of market volatilities on Falcon Focus and Cullen Enhanced 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 Falcon Focus with a short position of Cullen Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Focus and Cullen Enhanced.
Diversification Opportunities for Falcon Focus and Cullen Enhanced
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Falcon and Cullen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Focus Scv and Cullen Enhanced Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen Enhanced Equity and Falcon Focus 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 Falcon Focus Scv are associated (or correlated) with Cullen Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen Enhanced Equity has no effect on the direction of Falcon Focus i.e., Falcon Focus and Cullen Enhanced go up and down completely randomly.
Pair Corralation between Falcon Focus and Cullen Enhanced
Assuming the 90 days horizon Falcon Focus is expected to generate 4.15 times less return on investment than Cullen Enhanced. In addition to that, Falcon Focus is 1.12 times more volatile than Cullen Enhanced Equity. It trades about 0.02 of its total potential returns per unit of risk. Cullen Enhanced Equity is currently generating about 0.11 per unit of volatility. If you would invest 989.00 in Cullen Enhanced Equity on September 13, 2024 and sell it today you would earn a total of 86.00 from holding Cullen Enhanced Equity or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Falcon Focus Scv vs. Cullen Enhanced Equity
Performance |
| Timeline |
| Falcon Focus Scv |
| Cullen Enhanced Equity |
Falcon Focus and Cullen Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Focus and Cullen Enhanced
The main advantage of trading using opposite Falcon Focus and Cullen Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Focus position performs unexpectedly, Cullen Enhanced 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 Enhanced will offset losses from the drop in Cullen Enhanced's long position.| Falcon Focus vs. Atac Inflation Rotation | Falcon Focus vs. Ab Bond Inflation | Falcon Focus vs. Arrow Managed Futures | Falcon Focus vs. Guggenheim Managed Futures |
| 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 |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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