Correlation Between American Mutual and Dunham Large
Can any of the company-specific risk be diversified away by investing in both American Mutual and Dunham Large 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 American Mutual and Dunham Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Mutual Fund and Dunham Large Cap, you can compare the effects of market volatilities on American Mutual and Dunham Large 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 American Mutual with a short position of Dunham Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Dunham Large.
Diversification Opportunities for American Mutual and Dunham Large
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Dunham is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Dunham Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Large Cap and American Mutual 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 American Mutual Fund are associated (or correlated) with Dunham Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Large Cap has no effect on the direction of American Mutual i.e., American Mutual and Dunham Large go up and down completely randomly.
Pair Corralation between American Mutual and Dunham Large
Assuming the 90 days horizon American Mutual Fund is expected to generate 0.82 times more return on investment than Dunham Large. However, American Mutual Fund is 1.22 times less risky than Dunham Large. It trades about 0.16 of its potential returns per unit of risk. Dunham Large Cap is currently generating about 0.12 per unit of risk. If you would invest 4,826 in American Mutual Fund on August 31, 2024 and sell it today you would earn a total of 1,177 from holding American Mutual Fund or generate 24.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Mutual Fund vs. Dunham Large Cap
Performance |
| Timeline |
| American Mutual |
| Dunham Large Cap |
American Mutual and Dunham Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Dunham Large
The main advantage of trading using opposite American Mutual and Dunham Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Dunham Large 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 Large will offset losses from the drop in Dunham Large's long position.| American Mutual vs. Amcap Fund Class | American Mutual vs. American Balanced Fund | American Mutual vs. New Perspective Fund | American Mutual vs. New World Fund |
| Dunham Large vs. Vanguard Value Index | Dunham Large vs. Dodge Cox Stock | Dunham Large vs. American Mutual Fund | Dunham Large vs. American Funds American |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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