Correlation Between American Funds and Cullen High
Can any of the company-specific risk be diversified away by investing in both American Funds 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 American Funds and Cullen High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds American and Cullen High Dividend, you can compare the effects of market volatilities on American Funds 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 American Funds with a short position of Cullen High. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Cullen High.
Diversification Opportunities for American Funds and Cullen High
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Cullen is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding American Funds American 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 American Funds 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 American Funds American 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 American Funds i.e., American Funds and Cullen High go up and down completely randomly.
Pair Corralation between American Funds and Cullen High
Assuming the 90 days horizon American Funds American is expected to generate 1.06 times more return on investment than Cullen High. However, American Funds is 1.06 times more volatile than Cullen High Dividend. It trades about 0.11 of its potential returns per unit of risk. Cullen High Dividend is currently generating about 0.03 per unit of risk. If you would invest 5,908 in American Funds American on August 26, 2024 and sell it today you would earn a total of 90.00 from holding American Funds American or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds American vs. Cullen High Dividend
Performance |
| Timeline |
| American Funds American |
| Cullen High Dividend |
American Funds and Cullen High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Cullen High
The main advantage of trading using opposite American Funds and Cullen High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds 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.| American Funds vs. Income Fund Of | American Funds vs. New World Fund | American Funds vs. American Mutual Fund | American Funds vs. American Mutual Fund |
| Cullen High vs. Cullen Small Cap | Cullen High vs. Cullen Small Cap | Cullen High vs. Cullen Small Cap | Cullen High 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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