Correlation Between Transamerica Emerging and Cullen Emerging
Can any of the company-specific risk be diversified away by investing in both Transamerica Emerging 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 Transamerica Emerging and Cullen Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica Emerging Markets and Cullen Emerging Markets, you can compare the effects of market volatilities on Transamerica Emerging 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 Transamerica Emerging with a short position of Cullen Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Emerging and Cullen Emerging.
Diversification Opportunities for Transamerica Emerging and Cullen Emerging
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Transamerica and Cullen is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Emerging Markets 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 Transamerica Emerging 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 Transamerica Emerging Markets 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 Transamerica Emerging i.e., Transamerica Emerging and Cullen Emerging go up and down completely randomly.
Pair Corralation between Transamerica Emerging and Cullen Emerging
Assuming the 90 days horizon Transamerica Emerging Markets is expected to generate 1.03 times more return on investment than Cullen Emerging. However, Transamerica Emerging is 1.03 times more volatile than Cullen Emerging Markets. It trades about 0.01 of its potential returns per unit of risk. Cullen Emerging Markets is currently generating about 0.0 per unit of risk. If you would invest 792.00 in Transamerica Emerging Markets on September 3, 2024 and sell it today you would earn a total of 9.00 from holding Transamerica Emerging Markets or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transamerica Emerging Markets vs. Cullen Emerging Markets
Performance |
| Timeline |
| Transamerica Emerging |
| Cullen Emerging Markets |
Transamerica Emerging and Cullen Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Emerging and Cullen Emerging
The main advantage of trading using opposite Transamerica Emerging and Cullen Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Emerging 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.| Transamerica Emerging vs. Guggenheim High Yield | Transamerica Emerging vs. Lord Abbett High | Transamerica Emerging vs. Msift High Yield | Transamerica Emerging vs. Ppm High Yield |
| Cullen Emerging vs. Franklin Mutual Global | Cullen Emerging vs. Templeton Growth Fund | Cullen Emerging vs. Franklin Real Estate | Cullen Emerging vs. HUMANA INC |
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 Stocks Directory module to find actively traded stocks across global markets.
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