Correlation Between NYSE Composite and Cullen Value
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Cullen Value 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 NYSE Composite and Cullen Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Cullen Value Fund, you can compare the effects of market volatilities on NYSE Composite and Cullen Value 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 NYSE Composite with a short position of Cullen Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Cullen Value.
Diversification Opportunities for NYSE Composite and Cullen Value
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between NYSE and Cullen is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Cullen Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen Value and NYSE Composite 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 NYSE Composite are associated (or correlated) with Cullen Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen Value has no effect on the direction of NYSE Composite i.e., NYSE Composite and Cullen Value go up and down completely randomly.
Pair Corralation between NYSE Composite and Cullen Value
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.98 times more return on investment than Cullen Value. However, NYSE Composite is 1.02 times less risky than Cullen Value. It trades about 0.14 of its potential returns per unit of risk. Cullen Value Fund is currently generating about 0.12 per unit of risk. If you would invest 1,608,884 in NYSE Composite on August 26, 2024 and sell it today you would earn a total of 403,461 from holding NYSE Composite or generate 25.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Cullen Value Fund
Performance |
| Timeline |
NYSE Composite and Cullen Value Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Cullen Value Fund
Pair trading matchups for Cullen Value
Pair Trading with NYSE Composite and Cullen Value
The main advantage of trading using opposite NYSE Composite and Cullen Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Cullen Value 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 Value will offset losses from the drop in Cullen Value's long position.| NYSE Composite vs. Grocery Outlet Holding | NYSE Composite vs. Tencent Music Entertainment | NYSE Composite vs. SunLink Health Systems | NYSE Composite vs. Getty Realty |
| Cullen Value vs. Cullen Small Cap | Cullen Value vs. Cullen Small Cap | Cullen Value vs. Cullen Small Cap | Cullen Value 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 CEOs Directory module to screen CEOs from public companies around the world.
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