Correlation Between Us Targeted and Cullen Small

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

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

Diversification Opportunities for Us Targeted and Cullen Small

0.92

Correlation Coefficient

Us Targeted  Cullen Small

Almost no diversification

The 3 months correlation between DFFVX and Cullen is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Us Targeted Value and Cullen Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen Small Cap and Us Targeted 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 Us Targeted Value are associated (or correlated) with Cullen Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen Small Cap has no effect on the direction of Us Targeted i.e., Us Targeted and Cullen Small go up and down completely randomly.

Pair Corralation between Us Targeted and Cullen Small

Assuming the 90 days horizon Us Targeted Value is expected to generate 0.87 times more return on investment than Cullen Small. However, Us Targeted Value is 1.15 times less risky than Cullen Small. It trades about 0.16 of its potential returns per unit of risk. Cullen Small Cap is currently generating about 0.07 per unit of risk. If you would invest  3,228  in Us Targeted Value on September 12, 2024 and sell it today you would earn a total of  421.00  from holding Us Targeted Value or generate 13.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

Us Targeted Value  vs.  Cullen Small Cap

Us Targeted Value

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Us Targeted Value are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Us Targeted showed solid returns over the last few months and may actually be approaching a breakup point.

Cullen Small Cap

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cullen Small Cap are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Cullen Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Us Targeted and Cullen Small

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

The idea behind Us Targeted Value and Cullen 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.