Correlation Between International Value and Dunham Porategovernment
Can any of the company-specific risk be diversified away by investing in both International Value and Dunham Porategovernment 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 International Value and Dunham Porategovernment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Value Fund and Dunham Porategovernment Bond, you can compare the effects of market volatilities on International Value and Dunham Porategovernment 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 International Value with a short position of Dunham Porategovernment. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Value and Dunham Porategovernment.
Diversification Opportunities for International Value and Dunham Porategovernment
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between International and Dunham is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding International Value Fund and Dunham Porategovernment Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Porategovernment and International Value 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 International Value Fund are associated (or correlated) with Dunham Porategovernment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Porategovernment has no effect on the direction of International Value i.e., International Value and Dunham Porategovernment go up and down completely randomly.
Pair Corralation between International Value and Dunham Porategovernment
Assuming the 90 days horizon International Value Fund is expected to generate 2.28 times more return on investment than Dunham Porategovernment. However, International Value is 2.28 times more volatile than Dunham Porategovernment Bond. It trades about 0.08 of its potential returns per unit of risk. Dunham Porategovernment Bond is currently generating about 0.03 per unit of risk. If you would invest 874.00 in International Value Fund on September 15, 2024 and sell it today you would earn a total of 9.00 from holding International Value Fund or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
International Value Fund vs. Dunham Porategovernment Bond
Performance |
| Timeline |
| International Value |
| Dunham Porategovernment |
International Value and Dunham Porategovernment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Value and Dunham Porategovernment
The main advantage of trading using opposite International Value and Dunham Porategovernment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Value position performs unexpectedly, Dunham Porategovernment 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 Dunham Porategovernment will offset losses from the drop in Dunham Porategovernment's long position.| International Value vs. Easterly Snow Longshort | International Value vs. Barings Active Short | International Value vs. Delaware Investments Ultrashort | International Value vs. Touchstone Ultra Short |
| Dunham Porategovernment vs. Queens Road Small | Dunham Porategovernment vs. Fidelity Small Cap | Dunham Porategovernment vs. Great West Loomis Sayles | Dunham Porategovernment vs. Vanguard Small Cap Value |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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