Correlation Between Dunham Corporate/govern and Omni Small-cap
Can any of the company-specific risk be diversified away by investing in both Dunham Corporate/govern and Omni Small-cap 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 Corporate/govern and Omni Small-cap 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 Omni Small Cap Value, you can compare the effects of market volatilities on Dunham Corporate/govern and Omni Small-cap 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 Corporate/govern with a short position of Omni Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Corporate/govern and Omni Small-cap.
Diversification Opportunities for Dunham Corporate/govern and Omni Small-cap
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dunham and Omni is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Porategovernment Bond and Omni Small Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omni Small Cap and Dunham Corporate/govern 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 Omni Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omni Small Cap has no effect on the direction of Dunham Corporate/govern i.e., Dunham Corporate/govern and Omni Small-cap go up and down completely randomly.
Pair Corralation between Dunham Corporate/govern and Omni Small-cap
Assuming the 90 days horizon Dunham Corporate/govern is expected to generate 3.03 times less return on investment than Omni Small-cap. But when comparing it to its historical volatility, Dunham Porategovernment Bond is 4.35 times less risky than Omni Small-cap. It trades about 0.03 of its potential returns per unit of risk. Omni Small Cap Value is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,636 in Omni Small Cap Value on October 11, 2024 and sell it today you would earn a total of 159.00 from holding Omni Small Cap Value or generate 9.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Porategovernment Bond vs. Omni Small Cap Value
Performance |
| Timeline |
| Dunham Porategovernment |
| Omni Small Cap |
Dunham Corporate/govern and Omni Small-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Corporate/govern and Omni Small-cap
The main advantage of trading using opposite Dunham Corporate/govern and Omni Small-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Corporate/govern position performs unexpectedly, Omni Small-cap 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 Omni Small-cap will offset losses from the drop in Omni Small-cap's long position.| Dunham Corporate/govern vs. Locorr Market Trend | Dunham Corporate/govern vs. Ab Small Cap | Dunham Corporate/govern vs. Eic Value Fund | Dunham Corporate/govern vs. Commodities Strategy Fund |
| Omni Small-cap vs. Balanced Strategy Fund | Omni Small-cap vs. Mid Cap 15x Strategy | Omni Small-cap vs. Catalystmillburn Hedge Strategy | Omni Small-cap vs. Eagle Mlp Strategy |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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