Correlation Between Dunham Corporate/govern and Hennessy Cornerstone
Can any of the company-specific risk be diversified away by investing in both Dunham Corporate/govern and Hennessy Cornerstone 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 Hennessy Cornerstone 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 Hennessy Nerstone Large, you can compare the effects of market volatilities on Dunham Corporate/govern and Hennessy Cornerstone 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 Hennessy Cornerstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Corporate/govern and Hennessy Cornerstone.
Diversification Opportunities for Dunham Corporate/govern and Hennessy Cornerstone
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dunham and Hennessy is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Porategovernment Bond and Hennessy Nerstone Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Nerstone Large 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 Hennessy Cornerstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Nerstone Large has no effect on the direction of Dunham Corporate/govern i.e., Dunham Corporate/govern and Hennessy Cornerstone go up and down completely randomly.
Pair Corralation between Dunham Corporate/govern and Hennessy Cornerstone
Assuming the 90 days horizon Dunham Porategovernment Bond is expected to generate 0.45 times more return on investment than Hennessy Cornerstone. However, Dunham Porategovernment Bond is 2.22 times less risky than Hennessy Cornerstone. It trades about 0.2 of its potential returns per unit of risk. Hennessy Nerstone Large is currently generating about -0.22 per unit of risk. If you would invest 1,246 in Dunham Porategovernment Bond on December 1, 2024 and sell it today you would earn a total of 15.00 from holding Dunham Porategovernment Bond or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Porategovernment Bond vs. Hennessy Nerstone Large
Performance |
| Timeline |
| Dunham Porategovernment |
| Hennessy Nerstone Large |
Dunham Corporate/govern and Hennessy Cornerstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Corporate/govern and Hennessy Cornerstone
The main advantage of trading using opposite Dunham Corporate/govern and Hennessy Cornerstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Corporate/govern position performs unexpectedly, Hennessy Cornerstone 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 Hennessy Cornerstone will offset losses from the drop in Hennessy Cornerstone's long position.| Dunham Corporate/govern vs. Alpine High Yield | Dunham Corporate/govern vs. Ab High Income | Dunham Corporate/govern vs. Msift High Yield | Dunham Corporate/govern vs. Pace High Yield |
| Hennessy Cornerstone vs. Ashmore Emerging Markets | Hennessy Cornerstone vs. Transamerica International Small | Hennessy Cornerstone vs. Needham Small Cap | Hennessy Cornerstone vs. Nuveen Small Cap |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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