Correlation Between Cullen Small and Cullen International

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

Diversification Opportunities for Cullen Small and Cullen International

-0.74

Correlation Coefficient

Cullen Small  Cullen International

Pay attention - limited upside

The 3 months correlation between Cullen and Cullen is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Cullen Small Cap 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 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 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 Cullen Small i.e., Cullen Small and Cullen International go up and down completely randomly.

Pair Corralation between Cullen Small and Cullen International

Assuming the 90 days horizon Cullen Small Cap is expected to under-perform the Cullen International. In addition to that, Cullen Small is 1.75 times more volatile than Cullen International High. It trades about -0.09 of its total potential returns per unit of risk. Cullen International High is currently generating about 0.22 per unit of volatility. If you would invest  1,057  in Cullen International High on December 29, 2024 and sell it today you would earn a total of  115.00  from holding Cullen International High or generate 10.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Cullen Small Cap  vs.  Cullen International High

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 latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

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 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Cullen International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Cullen Small and Cullen International

The main advantage of trading using opposite Cullen Small and Cullen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullen Small 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 Cullen Small Cap 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.