Correlation Between Dunham Dynamic and Transamerica Emerging
Can any of the company-specific risk be diversified away by investing in both Dunham Dynamic and Transamerica 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 Dunham Dynamic and Transamerica Emerging 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 Transamerica Emerging Markets, you can compare the effects of market volatilities on Dunham Dynamic and Transamerica 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 Dunham Dynamic with a short position of Transamerica Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Dynamic and Transamerica Emerging.
Diversification Opportunities for Dunham Dynamic and Transamerica Emerging
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dunham and Transamerica is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Dynamic Macro and Transamerica Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Emerging 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 Transamerica Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Emerging has no effect on the direction of Dunham Dynamic i.e., Dunham Dynamic and Transamerica Emerging go up and down completely randomly.
Pair Corralation between Dunham Dynamic and Transamerica Emerging
Assuming the 90 days horizon Dunham Dynamic is expected to generate 1.9 times less return on investment than Transamerica Emerging. But when comparing it to its historical volatility, Dunham Dynamic Macro is 3.34 times less risky than Transamerica Emerging. It trades about 0.29 of its potential returns per unit of risk. Transamerica Emerging Markets is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 803.00 in Transamerica Emerging Markets on September 13, 2024 and sell it today you would earn a total of 16.00 from holding Transamerica Emerging Markets or generate 1.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Dynamic Macro vs. Transamerica Emerging Markets
Performance |
| Timeline |
| Dunham Dynamic Macro |
| Transamerica Emerging |
Dunham Dynamic and Transamerica Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Dynamic and Transamerica Emerging
The main advantage of trading using opposite Dunham Dynamic and Transamerica Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Dynamic position performs unexpectedly, Transamerica 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 Transamerica Emerging will offset losses from the drop in Transamerica Emerging's long position.| Dunham Dynamic vs. Invesco Global Health | Dunham Dynamic vs. Fidelity Advisor Health | Dunham Dynamic vs. Eventide Healthcare Life | Dunham Dynamic vs. Tekla Healthcare Opportunities |
| Transamerica Emerging vs. Smallcap Growth Fund | Transamerica Emerging vs. L Abbett Growth | Transamerica Emerging vs. T Rowe Price | Transamerica Emerging vs. Mid Cap Growth |
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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