Correlation Between Pace Smallmedium and Cullen Emerging
Can any of the company-specific risk be diversified away by investing in both Pace Smallmedium and Cullen Emerging 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 Pace Smallmedium and Cullen Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace Smallmedium Value and Cullen Emerging Markets, you can compare the effects of market volatilities on Pace Smallmedium and Cullen Emerging 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 Pace Smallmedium with a short position of Cullen Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Smallmedium and Cullen Emerging.
Diversification Opportunities for Pace Smallmedium and Cullen Emerging
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pace and Cullen is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Pace Smallmedium Value and Cullen Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen Emerging Markets and Pace Smallmedium 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 Pace Smallmedium Value are associated (or correlated) with Cullen Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen Emerging Markets has no effect on the direction of Pace Smallmedium i.e., Pace Smallmedium and Cullen Emerging go up and down completely randomly.
Pair Corralation between Pace Smallmedium and Cullen Emerging
Assuming the 90 days horizon Pace Smallmedium is expected to generate 1.72 times less return on investment than Cullen Emerging. In addition to that, Pace Smallmedium is 1.45 times more volatile than Cullen Emerging Markets. It trades about 0.04 of its total potential returns per unit of risk. Cullen Emerging Markets is currently generating about 0.1 per unit of volatility. If you would invest 1,280 in Cullen Emerging Markets on September 13, 2024 and sell it today you would earn a total of 15.00 from holding Cullen Emerging Markets or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace Smallmedium Value vs. Cullen Emerging Markets
Performance |
| Timeline |
| Pace Smallmedium Value |
| Cullen Emerging Markets |
Pace Smallmedium and Cullen Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Smallmedium and Cullen Emerging
The main advantage of trading using opposite Pace Smallmedium and Cullen Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Smallmedium position performs unexpectedly, Cullen Emerging 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 Emerging will offset losses from the drop in Cullen Emerging's long position.| Pace Smallmedium vs. Blackrock Health Sciences | Pace Smallmedium vs. Alger Health Sciences | Pace Smallmedium vs. Alphacentric Lifesci Healthcare | Pace Smallmedium vs. Live Oak Health |
| Cullen Emerging vs. Cullen Small Cap | Cullen Emerging vs. Cullen Small Cap | Cullen Emerging vs. Cullen Small Cap | Cullen Emerging 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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