Correlation Between Dunham Porategovernment and American Beacon
Can any of the company-specific risk be diversified away by investing in both Dunham Porategovernment and American Beacon 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 Porategovernment and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Porategovernment Bond and American Beacon The, you can compare the effects of market volatilities on Dunham Porategovernment and American Beacon 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 Porategovernment with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Porategovernment and American Beacon.
Diversification Opportunities for Dunham Porategovernment and American Beacon
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dunham and American is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Porategovernment Bond and American Beacon The in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon and Dunham Porategovernment 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 Porategovernment Bond are associated (or correlated) with American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon has no effect on the direction of Dunham Porategovernment i.e., Dunham Porategovernment and American Beacon go up and down completely randomly.
Pair Corralation between Dunham Porategovernment and American Beacon
Assuming the 90 days horizon Dunham Porategovernment Bond is expected to generate 0.5 times more return on investment than American Beacon. However, Dunham Porategovernment Bond is 1.99 times less risky than American Beacon. It trades about 0.11 of its potential returns per unit of risk. American Beacon The is currently generating about -0.14 per unit of risk. If you would invest 1,258 in Dunham Porategovernment Bond on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Dunham Porategovernment Bond or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dunham Porategovernment Bond vs. American Beacon The
Performance |
| Timeline |
| Dunham Porategovernment |
| American Beacon |
Dunham Porategovernment and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Porategovernment and American Beacon
The main advantage of trading using opposite Dunham Porategovernment and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Porategovernment position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon's long position.| Dunham Porategovernment vs. Metropolitan West Total | Dunham Porategovernment vs. SCOR PK | Dunham Porategovernment vs. Morningstar Unconstrained Allocation | Dunham Porategovernment vs. Thrivent High Yield |
| American Beacon vs. Dunham Porategovernment Bond | American Beacon vs. Dreyfus Government Cash | American Beacon vs. Lord Abbett Government | American Beacon vs. Davis Government Bond |
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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