Correlation Between Cullen High and The Arbitrage
Can any of the company-specific risk be diversified away by investing in both Cullen High and The Arbitrage 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 Cullen High and The Arbitrage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cullen High Dividend and The Arbitrage Event Driven, you can compare the effects of market volatilities on Cullen High and The Arbitrage 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 Cullen High with a short position of The Arbitrage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullen High and The Arbitrage.
Diversification Opportunities for Cullen High and The Arbitrage
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cullen and The is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Cullen High Dividend and The Arbitrage Event Driven in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbitrage Event and Cullen High 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 Cullen High Dividend are associated (or correlated) with The Arbitrage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbitrage Event has no effect on the direction of Cullen High i.e., Cullen High and The Arbitrage go up and down completely randomly.
Pair Corralation between Cullen High and The Arbitrage
Assuming the 90 days horizon Cullen High Dividend is expected to generate 2.52 times more return on investment than The Arbitrage. However, Cullen High is 2.52 times more volatile than The Arbitrage Event Driven. It trades about 0.09 of its potential returns per unit of risk. The Arbitrage Event Driven is currently generating about 0.03 per unit of risk. If you would invest 1,461 in Cullen High Dividend on September 6, 2024 and sell it today you would earn a total of 44.00 from holding Cullen High Dividend or generate 3.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Cullen High Dividend vs. The Arbitrage Event Driven
Performance |
Timeline |
Cullen High Dividend |
Arbitrage Event |
Cullen High and The Arbitrage Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cullen High and The Arbitrage
The main advantage of trading using opposite Cullen High and The Arbitrage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullen High position performs unexpectedly, The Arbitrage 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 The Arbitrage will offset losses from the drop in The Arbitrage's long position.Cullen High vs. The Value Fund | Cullen High vs. Lazard Global Listed | Cullen High vs. Lazard International Strategic | Cullen High vs. Tcw Relative Value |
The Arbitrage vs. Aqr Diversified Arbitrage | The Arbitrage vs. Baron Emerging Markets | The Arbitrage vs. The Arbitrage Fund | The Arbitrage vs. Brandes 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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