Correlation Between Small Cap and Cullen International
Can any of the company-specific risk be diversified away by investing in both Small Cap 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 Small Cap and Cullen International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Stock and Cullen International High, you can compare the effects of market volatilities on Small Cap 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 Small Cap with a short position of Cullen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Cullen International.
Diversification Opportunities for Small Cap and Cullen International
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Small and Cullen is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Stock 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 Small Cap 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 Small Cap Stock 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 Small Cap i.e., Small Cap and Cullen International go up and down completely randomly.
Pair Corralation between Small Cap and Cullen International
Assuming the 90 days horizon Small Cap is expected to generate 2.12 times less return on investment than Cullen International. In addition to that, Small Cap is 1.97 times more volatile than Cullen International High. It trades about 0.04 of its total potential returns per unit of risk. Cullen International High is currently generating about 0.16 per unit of volatility. If you would invest 1,078 in Cullen International High on September 14, 2024 and sell it today you would earn a total of 17.00 from holding Cullen International High or generate 1.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Cap Stock vs. Cullen International High
Performance |
| Timeline |
| Small Cap Stock |
| Cullen International High |
Small Cap and Cullen International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Cullen International
The main advantage of trading using opposite Small Cap and Cullen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap 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.| Small Cap vs. Guggenheim Managed Futures | Small Cap vs. Simt Multi Asset Inflation | Small Cap vs. Goldman Sachs Inflation | Small Cap vs. Loomis Sayles Inflation |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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