Correlation Between Cullen Small and Aston/crosswind Small

Can any of the company-specific risk be diversified away by investing in both Cullen Small and Aston/crosswind Small 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 Small and Aston/crosswind Small into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cullen Small Cap and Astoncrosswind Small Cap, you can compare the effects of market volatilities on Cullen Small and Aston/crosswind Small 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 Small with a short position of Aston/crosswind Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullen Small and Aston/crosswind Small.

Diversification Opportunities for Cullen Small and Aston/crosswind Small

0.9

Correlation Coefficient

Cullen Small  Aston/crosswind Small

Almost no diversification

The 3 months correlation between Cullen and Aston/Crosswind is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Cullen Small Cap and Astoncrosswind Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astoncrosswind Small Cap and Cullen Small 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 Small Cap are associated (or correlated) with Aston/crosswind Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astoncrosswind Small Cap has no effect on the direction of Cullen Small i.e., Cullen Small and Aston/crosswind Small go up and down completely randomly.

Pair Corralation between Cullen Small and Aston/crosswind Small

Assuming the 90 days horizon Cullen Small Cap is expected to under-perform the Aston/crosswind Small. In addition to that, Cullen Small is 1.33 times more volatile than Astoncrosswind Small Cap. It trades about -0.08 of its total potential returns per unit of risk. Astoncrosswind Small Cap is currently generating about -0.04 per unit of volatility. If you would invest  1,716  in Astoncrosswind Small Cap on December 2, 2024 and sell it today you would lose (31.00) from holding Astoncrosswind Small Cap or give up 1.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Cullen Small Cap  vs.  Astoncrosswind Small Cap

Cullen Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cullen Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Astoncrosswind Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Astoncrosswind Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Cullen Small and Aston/crosswind Small

The main advantage of trading using opposite Cullen Small and Aston/crosswind Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullen Small position performs unexpectedly, Aston/crosswind Small 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 Aston/crosswind Small will offset losses from the drop in Aston/crosswind Small's long position.

The idea behind Cullen Small Cap and Astoncrosswind Small Cap 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.