Correlation Between Dunham Corporate/govern and Aquila Tax-free
Can any of the company-specific risk be diversified away by investing in both Dunham Corporate/govern and Aquila Tax-free 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 Aquila Tax-free 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 Aquila Tax Free Trust, you can compare the effects of market volatilities on Dunham Corporate/govern and Aquila Tax-free 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 Aquila Tax-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Corporate/govern and Aquila Tax-free.
Diversification Opportunities for Dunham Corporate/govern and Aquila Tax-free
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dunham and Aquila is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Porategovernment Bond and Aquila Tax Free Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquila Tax Free 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 Aquila Tax-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquila Tax Free has no effect on the direction of Dunham Corporate/govern i.e., Dunham Corporate/govern and Aquila Tax-free go up and down completely randomly.
Pair Corralation between Dunham Corporate/govern and Aquila Tax-free
Assuming the 90 days horizon Dunham Porategovernment Bond is expected to generate 2.45 times more return on investment than Aquila Tax-free. However, Dunham Corporate/govern is 2.45 times more volatile than Aquila Tax Free Trust. It trades about 0.08 of its potential returns per unit of risk. Aquila Tax Free Trust is currently generating about 0.05 per unit of risk. If you would invest 1,188 in Dunham Porategovernment Bond on September 4, 2024 and sell it today you would earn a total of 75.00 from holding Dunham Porategovernment Bond or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 61.94% |
| Values | Daily Returns |
Dunham Porategovernment Bond vs. Aquila Tax Free Trust
Performance |
| Timeline |
| Dunham Porategovernment |
| Aquila Tax Free |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Dunham Corporate/govern and Aquila Tax-free Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Corporate/govern and Aquila Tax-free
The main advantage of trading using opposite Dunham Corporate/govern and Aquila Tax-free positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Corporate/govern position performs unexpectedly, Aquila Tax-free 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 Aquila Tax-free will offset losses from the drop in Aquila Tax-free's long position.The idea behind Dunham Porategovernment Bond and Aquila Tax Free Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Aquila Tax-free vs. Dunham Porategovernment Bond | Aquila Tax-free vs. Fidelity Series Government | Aquila Tax-free vs. Prudential Government Income | Aquila Tax-free vs. Government Securities Fund |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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