Correlation Between Dunham Corporate/govern and American Funds
Can any of the company-specific risk be diversified away by investing in both Dunham Corporate/govern and American Funds 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 American Funds 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 Funds Government, you can compare the effects of market volatilities on Dunham Corporate/govern and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Corporate/govern and American Funds.
Diversification Opportunities for Dunham Corporate/govern and American Funds
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Dunham and American is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Porategovernment Bond and American Funds Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Government 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Government has no effect on the direction of Dunham Corporate/govern i.e., Dunham Corporate/govern and American Funds go up and down completely randomly.
Pair Corralation between Dunham Corporate/govern and American Funds
Assuming the 90 days horizon Dunham Porategovernment Bond is expected to generate 0.8 times more return on investment than American Funds. However, Dunham Porategovernment Bond is 1.25 times less risky than American Funds. It trades about 0.06 of its potential returns per unit of risk. American Funds Government is currently generating about 0.02 per unit of risk. If you would invest 1,178 in Dunham Porategovernment Bond on August 31, 2024 and sell it today you would earn a total of 86.00 from holding Dunham Porategovernment Bond or generate 7.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Porategovernment Bond vs. American Funds Government
Performance |
| Timeline |
| Dunham Porategovernment |
| American Funds Government |
Dunham Corporate/govern and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Corporate/govern and American Funds
The main advantage of trading using opposite Dunham Corporate/govern and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Corporate/govern position performs unexpectedly, American Funds 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 Funds will offset losses from the drop in American Funds' long position.| Dunham Corporate/govern vs. Metropolitan West Total | Dunham Corporate/govern vs. Metropolitan West Total | Dunham Corporate/govern vs. Pimco Total Return | Dunham Corporate/govern vs. Total Return Fund |
| American Funds vs. Ab Government Exchange | American Funds vs. Lord Abbett Government | American Funds vs. Dws Government Money | American Funds vs. Dunham Porategovernment 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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