Correlation Between Palm Valley and Cullen International
Can any of the company-specific risk be diversified away by investing in both Palm Valley and Cullen International 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 Palm Valley and Cullen International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palm Valley Capital and Cullen International High, you can compare the effects of market volatilities on Palm Valley and Cullen International 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 Palm Valley with a short position of Cullen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palm Valley and Cullen International.
Diversification Opportunities for Palm Valley and Cullen International
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Palm and Cullen is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Palm Valley Capital and Cullen International High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen International High and Palm Valley 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 Palm Valley Capital are associated (or correlated) with Cullen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen International High has no effect on the direction of Palm Valley i.e., Palm Valley and Cullen International go up and down completely randomly.
Pair Corralation between Palm Valley and Cullen International
Assuming the 90 days horizon Palm Valley is expected to generate 1.24 times less return on investment than Cullen International. But when comparing it to its historical volatility, Palm Valley Capital is 3.59 times less risky than Cullen International. It trades about 0.18 of its potential returns per unit of risk. Cullen International High is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,088 in Cullen International High on September 13, 2024 and sell it today you would earn a total of 7.00 from holding Cullen International High or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Palm Valley Capital vs. Cullen International High
Performance |
| Timeline |
| Palm Valley Capital |
| Cullen International High |
Palm Valley and Cullen International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palm Valley and Cullen International
The main advantage of trading using opposite Palm Valley and Cullen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palm Valley position performs unexpectedly, Cullen International 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 International will offset losses from the drop in Cullen International's long position.| Palm Valley vs. Simplify Interest Rate | Palm Valley vs. Standpoint Multi Asset | Palm Valley vs. Goehring Rozencwajg Resources | Palm Valley vs. The Acquirers |
| Cullen International vs. Small Cap Stock | Cullen International vs. L Abbett Fundamental | Cullen International vs. Ab Small Cap | Cullen International vs. Rbb 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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