Correlation Between Dunham Focused and Dunham Appreciation
Can any of the company-specific risk be diversified away by investing in both Dunham Focused and Dunham Appreciation 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 Focused and Dunham Appreciation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Focused Large and Dunham Appreciation Income, you can compare the effects of market volatilities on Dunham Focused and Dunham Appreciation 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 Focused with a short position of Dunham Appreciation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Focused and Dunham Appreciation.
Diversification Opportunities for Dunham Focused and Dunham Appreciation
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dunham and Dunham is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Focused Large and Dunham Appreciation Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Appreciation and Dunham Focused 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 Focused Large are associated (or correlated) with Dunham Appreciation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Appreciation has no effect on the direction of Dunham Focused i.e., Dunham Focused and Dunham Appreciation go up and down completely randomly.
Pair Corralation between Dunham Focused and Dunham Appreciation
Assuming the 90 days horizon Dunham Focused Large is expected to generate 12.14 times more return on investment than Dunham Appreciation. However, Dunham Focused is 12.14 times more volatile than Dunham Appreciation Income. It trades about 0.07 of its potential returns per unit of risk. Dunham Appreciation Income is currently generating about 0.11 per unit of risk. If you would invest 2,527 in Dunham Focused Large on November 29, 2024 and sell it today you would earn a total of 1,343 from holding Dunham Focused Large or generate 53.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Dunham Focused Large vs. Dunham Appreciation Income
Performance |
| Timeline |
| Dunham Focused Large |
| Dunham Appreciation |
Dunham Focused and Dunham Appreciation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Focused and Dunham Appreciation
The main advantage of trading using opposite Dunham Focused and Dunham Appreciation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Focused position performs unexpectedly, Dunham Appreciation 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 Dunham Appreciation will offset losses from the drop in Dunham Appreciation's long position.| Dunham Focused vs. Ashmore Emerging Markets | Dunham Focused vs. Nuveen Small Cap | Dunham Focused vs. Ab Small Cap | Dunham Focused vs. Small Pany Growth |
| Dunham Appreciation vs. Nuveen Small Cap | Dunham Appreciation vs. Ab Small Cap | Dunham Appreciation vs. Old Westbury Small | Dunham Appreciation vs. Glg Intl Small |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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