Correlation Between Gmo Core and Cullen Enhanced
Can any of the company-specific risk be diversified away by investing in both Gmo Core 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 Gmo Core and Cullen Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo E Plus and Cullen Enhanced Equity, you can compare the effects of market volatilities on Gmo Core 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 Gmo Core with a short position of Cullen Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Core and Cullen Enhanced.
Diversification Opportunities for Gmo Core and Cullen Enhanced
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gmo and Cullen is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Gmo E Plus 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 Gmo Core 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 Gmo E Plus 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 Gmo Core i.e., Gmo Core and Cullen Enhanced go up and down completely randomly.
Pair Corralation between Gmo Core and Cullen Enhanced
Assuming the 90 days horizon Gmo Core is expected to generate 1.86 times less return on investment than Cullen Enhanced. But when comparing it to its historical volatility, Gmo E Plus is 1.62 times less risky than Cullen Enhanced. It trades about 0.03 of its potential returns per unit of risk. Cullen Enhanced Equity is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 978.00 in Cullen Enhanced Equity on August 26, 2024 and sell it today you would earn a total of 118.00 from holding Cullen Enhanced Equity or generate 12.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo E Plus vs. Cullen Enhanced Equity
Performance |
| Timeline |
| Gmo E Plus |
| Cullen Enhanced Equity |
Gmo Core and Cullen Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Core and Cullen Enhanced
The main advantage of trading using opposite Gmo Core and Cullen Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Core 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.| Gmo Core vs. Rationalpier 88 Convertible | Gmo Core vs. Chartwell Short Duration | Gmo Core vs. Barings Active Short | Gmo Core vs. Limited Term Tax |
| Cullen Enhanced vs. Cullen Small Cap | Cullen Enhanced vs. Cullen Small Cap | Cullen Enhanced vs. Cullen Small Cap | Cullen Enhanced 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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