Correlation Between Cambiar International and Cullen International

Can any of the company-specific risk be diversified away by investing in both Cambiar International 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 Cambiar International and Cullen International 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 International High, you can compare the effects of market volatilities on Cambiar International 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 Cambiar International with a short position of Cullen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambiar International and Cullen International.

Diversification Opportunities for Cambiar International and Cullen International

0.97

Correlation Coefficient

Cambiar International  Cullen International

Almost no diversification

The 3 months correlation between Cambiar and Cullen is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Cambiar International Equity 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 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 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 Cambiar International i.e., Cambiar International and Cullen International go up and down completely randomly.

Pair Corralation between Cambiar International and Cullen International

Assuming the 90 days horizon Cambiar International is expected to generate 1.06 times less return on investment than Cullen International. But when comparing it to its historical volatility, Cambiar International Equity is 1.05 times less risky than Cullen International. It trades about 0.21 of its potential returns per unit of risk. Cullen International High is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  1,078  in Cullen International High on December 29, 2024 and sell it today you would earn a total of  117.00  from holding Cullen International High or generate 10.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Cambiar International Equity  vs.  Cullen International High

Cambiar International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cambiar International Equity are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Cambiar International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Cullen International High

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cullen International High are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Cullen International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Cambiar International and Cullen International

The main advantage of trading using opposite Cambiar International and Cullen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambiar International 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.

The idea behind Cambiar International Equity and Cullen International High pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.