Correlation Between Absolute Convertible and Dunham Emerging
Can any of the company-specific risk be diversified away by investing in both Absolute Convertible and Dunham Emerging 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 Absolute Convertible and Dunham Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolute Convertible Arbitrage and Dunham Emerging Markets, you can compare the effects of market volatilities on Absolute Convertible and Dunham Emerging 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 Absolute Convertible with a short position of Dunham Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Convertible and Dunham Emerging.
Diversification Opportunities for Absolute Convertible and Dunham Emerging
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Absolute and Dunham is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Convertible Arbitrage and Dunham Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Emerging Markets and Absolute Convertible 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 Absolute Convertible Arbitrage are associated (or correlated) with Dunham Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Emerging Markets has no effect on the direction of Absolute Convertible i.e., Absolute Convertible and Dunham Emerging go up and down completely randomly.
Pair Corralation between Absolute Convertible and Dunham Emerging
Assuming the 90 days horizon Absolute Convertible Arbitrage is expected to generate 0.07 times more return on investment than Dunham Emerging. However, Absolute Convertible Arbitrage is 14.66 times less risky than Dunham Emerging. It trades about 0.37 of its potential returns per unit of risk. Dunham Emerging Markets is currently generating about 0.02 per unit of risk. If you would invest 1,020 in Absolute Convertible Arbitrage on September 3, 2024 and sell it today you would earn a total of 130.00 from holding Absolute Convertible Arbitrage or generate 12.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absolute Convertible Arbitrage vs. Dunham Emerging Markets
Performance |
| Timeline |
| Absolute Convertible |
| Dunham Emerging Markets |
Absolute Convertible and Dunham Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Convertible and Dunham Emerging
The main advantage of trading using opposite Absolute Convertible and Dunham Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Convertible position performs unexpectedly, Dunham Emerging 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 Emerging will offset losses from the drop in Dunham Emerging's long position.| Absolute Convertible vs. Dunham Porategovernment Bond | Absolute Convertible vs. John Hancock Government | Absolute Convertible vs. Government Securities Fund | Absolute Convertible vs. Ab Government Exchange |
| Dunham Emerging vs. Mondrian Emerging Markets | Dunham Emerging vs. The Emerging Markets | Dunham Emerging vs. Dodge Cox Emerging | Dunham Emerging vs. Ep Emerging Markets |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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