Correlation Between Dunham Appreciation and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Dunham Appreciation and Dow Jones 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 Dunham Appreciation and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Appreciation Income and Dow Jones Industrial, you can compare the effects of market volatilities on Dunham Appreciation and Dow Jones 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 Dunham Appreciation with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Appreciation and Dow Jones.
Diversification Opportunities for Dunham Appreciation and Dow Jones
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dunham and Dow is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Appreciation Income and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Dunham Appreciation 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 Dunham Appreciation Income are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Dunham Appreciation i.e., Dunham Appreciation and Dow Jones go up and down completely randomly.
Pair Corralation between Dunham Appreciation and Dow Jones
Assuming the 90 days horizon Dunham Appreciation is expected to generate 5.36 times less return on investment than Dow Jones. But when comparing it to its historical volatility, Dunham Appreciation Income is 12.6 times less risky than Dow Jones. It trades about 0.28 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,889,280 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 601,785 from holding Dow Jones Industrial or generate 15.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Appreciation Income vs. Dow Jones Industrial
Performance |
| Timeline |
Dunham Appreciation and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Dunham Appreciation Income
Pair trading matchups for Dunham Appreciation
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Dunham Appreciation and Dow Jones
The main advantage of trading using opposite Dunham Appreciation and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Appreciation position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Dunham Appreciation vs. Fa 529 Aggressive | Dunham Appreciation vs. Qs Large Cap | Dunham Appreciation vs. Ab Value Fund | Dunham Appreciation vs. Scharf Global Opportunity |
| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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