Correlation Between California Bond and Cullen Value
Can any of the company-specific risk be diversified away by investing in both California Bond 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 California Bond and Cullen Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California Bond Fund and Cullen Value Fund, you can compare the effects of market volatilities on California Bond 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 California Bond with a short position of Cullen Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of California Bond and Cullen Value.
Diversification Opportunities for California Bond and Cullen Value
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between California and Cullen is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding California Bond Fund and Cullen Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen Value and California Bond 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 California Bond Fund 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 California Bond i.e., California Bond and Cullen Value go up and down completely randomly.
Pair Corralation between California Bond and Cullen Value
Assuming the 90 days horizon California Bond Fund is expected to generate 0.48 times more return on investment than Cullen Value. However, California Bond Fund is 2.09 times less risky than Cullen Value. It trades about 0.18 of its potential returns per unit of risk. Cullen Value Fund is currently generating about -0.11 per unit of risk. If you would invest 1,028 in California Bond Fund on November 28, 2024 and sell it today you would earn a total of 10.00 from holding California Bond Fund or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
California Bond Fund vs. Cullen Value Fund
Performance |
| Timeline |
| California Bond |
| Cullen Value |
California Bond and Cullen Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California Bond and Cullen Value
The main advantage of trading using opposite California Bond and Cullen Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California Bond 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.| California Bond vs. Vy Blackrock Inflation | California Bond vs. Simt Multi Asset Inflation | California Bond vs. Credit Suisse Multialternative | California Bond vs. Ab Bond Inflation |
| Cullen Value vs. Jhancock Diversified Macro | Cullen Value vs. Blackrock Conservative Prprdptfinstttnl | Cullen Value vs. Voya Solution Conservative | Cullen Value vs. Calvert Conservative Allocation |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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