Correlation Between Cambiar International and Cullen High
Can any of the company-specific risk be diversified away by investing in both Cambiar International and Cullen High 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 Cambiar International and Cullen High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambiar International Equity and Cullen High Dividend, you can compare the effects of market volatilities on Cambiar International and Cullen High 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 Cambiar International with a short position of Cullen High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambiar International and Cullen High.
Diversification Opportunities for Cambiar International and Cullen High
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cambiar and Cullen is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Cambiar International Equity and Cullen High Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen High Dividend and Cambiar International 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 Cambiar International Equity are associated (or correlated) with Cullen High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen High Dividend has no effect on the direction of Cambiar International i.e., Cambiar International and Cullen High go up and down completely randomly.
Pair Corralation between Cambiar International and Cullen High
Assuming the 90 days horizon Cambiar International is expected to generate 4.42 times less return on investment than Cullen High. In addition to that, Cambiar International is 1.25 times more volatile than Cullen High Dividend. It trades about 0.02 of its total potential returns per unit of risk. Cullen High Dividend is currently generating about 0.09 per unit of volatility. If you would invest 1,408 in Cullen High Dividend on September 5, 2024 and sell it today you would earn a total of 97.00 from holding Cullen High Dividend or generate 6.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Cambiar International Equity vs. Cullen High Dividend
Performance |
Timeline |
Cambiar International |
Cullen High Dividend |
Cambiar International and Cullen High Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cambiar International and Cullen High
The main advantage of trading using opposite Cambiar International and Cullen High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambiar International position performs unexpectedly, Cullen High 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 High will offset losses from the drop in Cullen High's long position.Cambiar International vs. Causeway Emerging Markets | Cambiar International vs. Cambiar Small Cap | Cambiar International vs. Pimco Short Term Fund | Cambiar International vs. Cambiar Opportunity Fund |
Cullen High vs. Cullen Small Cap | Cullen High vs. Cullen Small Cap | Cullen High vs. Cullen Small Cap | Cullen High vs. Cullen Emerging Markets |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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