Correlation Between Dunham Large and Dreyfus International
Can any of the company-specific risk be diversified away by investing in both Dunham Large and Dreyfus International 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 Large and Dreyfus International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Large Cap and Dreyfus International Equity, you can compare the effects of market volatilities on Dunham Large and Dreyfus International 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 Large with a short position of Dreyfus International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Large and Dreyfus International.
Diversification Opportunities for Dunham Large and Dreyfus International
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DUNHAM and Dreyfus is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Large Cap and Dreyfus International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus International and Dunham Large 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 Large Cap are associated (or correlated) with Dreyfus International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus International has no effect on the direction of Dunham Large i.e., Dunham Large and Dreyfus International go up and down completely randomly.
Pair Corralation between Dunham Large and Dreyfus International
Assuming the 90 days horizon Dunham Large Cap is expected to generate 0.87 times more return on investment than Dreyfus International. However, Dunham Large Cap is 1.15 times less risky than Dreyfus International. It trades about 0.35 of its potential returns per unit of risk. Dreyfus International Equity is currently generating about -0.05 per unit of risk. If you would invest 2,025 in Dunham Large Cap on September 1, 2024 and sell it today you would earn a total of 111.00 from holding Dunham Large Cap or generate 5.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Large Cap vs. Dreyfus International Equity
Performance |
| Timeline |
| Dunham Large Cap |
| Dreyfus International |
Dunham Large and Dreyfus International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Large and Dreyfus International
The main advantage of trading using opposite Dunham Large and Dreyfus International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Large position performs unexpectedly, Dreyfus International 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 Dreyfus International will offset losses from the drop in Dreyfus International's long position.| Dunham Large vs. Dunham Appreciation Income | Dunham Large vs. Dunham Dynamic Macro | Dunham Large vs. Dunham Small Cap | Dunham Large vs. Dunham Emerging Markets |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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