Correlation Between Dunham Dynamic and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Dunham Dynamic and Fidelity Advisor 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 Dynamic and Fidelity Advisor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Dynamic Macro and Fidelity Advisor Health, you can compare the effects of market volatilities on Dunham Dynamic and Fidelity Advisor 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 Dynamic with a short position of Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Dynamic and Fidelity Advisor.
Diversification Opportunities for Dunham Dynamic and Fidelity Advisor
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DUNHAM and Fidelity is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Dynamic Macro and Fidelity Advisor Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Health and Dunham Dynamic 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 Dynamic Macro are associated (or correlated) with Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Health has no effect on the direction of Dunham Dynamic i.e., Dunham Dynamic and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Dunham Dynamic and Fidelity Advisor
Assuming the 90 days horizon Dunham Dynamic Macro is expected to generate 0.2 times more return on investment than Fidelity Advisor. However, Dunham Dynamic Macro is 5.04 times less risky than Fidelity Advisor. It trades about -0.18 of its potential returns per unit of risk. Fidelity Advisor Health is currently generating about -0.19 per unit of risk. If you would invest 1,212 in Dunham Dynamic Macro on October 24, 2024 and sell it today you would lose (28.00) from holding Dunham Dynamic Macro or give up 2.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Dynamic Macro vs. Fidelity Advisor Health
Performance |
| Timeline |
| Dunham Dynamic Macro |
| Fidelity Advisor Health |
Dunham Dynamic and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Dynamic and Fidelity Advisor
The main advantage of trading using opposite Dunham Dynamic and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Dynamic position performs unexpectedly, Fidelity Advisor 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 Fidelity Advisor will offset losses from the drop in Fidelity Advisor's long position.| Dunham Dynamic vs. Msift High Yield | Dunham Dynamic vs. Lord Abbett Short | Dunham Dynamic vs. Catalystsmh High Income | Dunham Dynamic vs. Siit High Yield |
| Fidelity Advisor vs. Fidelity Advisor Technology | Fidelity Advisor vs. Fidelity Advisor Biotechnology | Fidelity Advisor vs. Fidelity Advisor Financial | Fidelity Advisor vs. Fidelity Advisor Utilities |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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