Correlation Between Dunham High and Northern Global
Can any of the company-specific risk be diversified away by investing in both Dunham High and Northern Global 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 High and Northern Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham High Yield and Northern Global Real, you can compare the effects of market volatilities on Dunham High and Northern Global 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 High with a short position of Northern Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham High and Northern Global.
Diversification Opportunities for Dunham High and Northern Global
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dunham and Northern is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dunham High Yield and Northern Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Global Real and Dunham High 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 High Yield are associated (or correlated) with Northern Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Global Real has no effect on the direction of Dunham High i.e., Dunham High and Northern Global go up and down completely randomly.
Pair Corralation between Dunham High and Northern Global
Assuming the 90 days horizon Dunham High is expected to generate 1.99 times less return on investment than Northern Global. But when comparing it to its historical volatility, Dunham High Yield is 4.23 times less risky than Northern Global. It trades about 0.21 of its potential returns per unit of risk. Northern Global Real is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 821.00 in Northern Global Real on September 1, 2024 and sell it today you would earn a total of 211.00 from holding Northern Global Real or generate 25.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham High Yield vs. Northern Global Real
Performance |
| Timeline |
| Dunham High Yield |
| Northern Global Real |
Dunham High and Northern Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham High and Northern Global
The main advantage of trading using opposite Dunham High and Northern Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham High position performs unexpectedly, Northern Global 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 Northern Global will offset losses from the drop in Northern Global's long position.| Dunham High vs. Dunham Dynamic Macro | Dunham High vs. Dunham Porategovernment Bond | Dunham High vs. Dunham Small Cap | Dunham High vs. Dunham Emerging Markets |
| Northern Global vs. Northern Bond Index | Northern Global vs. Northern Arizona Tax Exempt | Northern Global vs. Northern Emerging Markets | Northern Global vs. Northern Fixed Income |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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