Correlation Between Dunham Porategovernment and Midcap Growth
Can any of the company-specific risk be diversified away by investing in both Dunham Porategovernment and Midcap Growth 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 Midcap Growth 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 Midcap Growth Fund, you can compare the effects of market volatilities on Dunham Porategovernment and Midcap Growth 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 Midcap Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Porategovernment and Midcap Growth.
Diversification Opportunities for Dunham Porategovernment and Midcap Growth
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dunham and Midcap is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Porategovernment Bond and Midcap Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midcap Growth 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 Midcap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midcap Growth has no effect on the direction of Dunham Porategovernment i.e., Dunham Porategovernment and Midcap Growth go up and down completely randomly.
Pair Corralation between Dunham Porategovernment and Midcap Growth
Assuming the 90 days horizon Dunham Porategovernment is expected to generate 6.15 times less return on investment than Midcap Growth. But when comparing it to its historical volatility, Dunham Porategovernment Bond is 4.74 times less risky than Midcap Growth. It trades about 0.17 of its potential returns per unit of risk. Midcap Growth Fund is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,038 in Midcap Growth Fund on September 13, 2024 and sell it today you would earn a total of 51.00 from holding Midcap Growth Fund or generate 4.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Porategovernment Bond vs. Midcap Growth Fund
Performance |
| Timeline |
| Dunham Porategovernment |
| Midcap Growth |
Dunham Porategovernment and Midcap Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Porategovernment and Midcap Growth
The main advantage of trading using opposite Dunham Porategovernment and Midcap Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Porategovernment position performs unexpectedly, Midcap Growth 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 Midcap Growth will offset losses from the drop in Midcap Growth's long position.| Dunham Porategovernment vs. Ab Small Cap | Dunham Porategovernment vs. Vy Columbia Small | Dunham Porategovernment vs. Old Westbury Small | Dunham Porategovernment vs. Pace Smallmedium Value |
| Midcap Growth vs. Ab Small Cap | Midcap Growth vs. Royce Opportunity Fund | Midcap Growth vs. Heartland Value Plus | Midcap Growth vs. Fpa Queens Road |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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