Correlation Between Dunham Large and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Dunham Large and Old Westbury 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 Old Westbury 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 Old Westbury New, you can compare the effects of market volatilities on Dunham Large and Old Westbury 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 Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Large and Old Westbury.
Diversification Opportunities for Dunham Large and Old Westbury
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dunham and Old is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Large Cap and Old Westbury New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury New 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 Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury New has no effect on the direction of Dunham Large i.e., Dunham Large and Old Westbury go up and down completely randomly.
Pair Corralation between Dunham Large and Old Westbury
Assuming the 90 days horizon Dunham Large Cap is expected to generate 4.72 times more return on investment than Old Westbury. However, Dunham Large is 4.72 times more volatile than Old Westbury New. It trades about 0.08 of its potential returns per unit of risk. Old Westbury New is currently generating about 0.06 per unit of risk. If you would invest 1,588 in Dunham Large Cap on September 5, 2024 and sell it today you would earn a total of 536.00 from holding Dunham Large Cap or generate 33.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Dunham Large Cap vs. Old Westbury New
Performance |
| Timeline |
| Dunham Large Cap |
| Old Westbury New |
Dunham Large and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Large and Old Westbury
The main advantage of trading using opposite Dunham Large and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Large position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury's long position.| Dunham Large vs. Glg Intl Small | Dunham Large vs. Tax Managed Mid Small | Dunham Large vs. Small Pany Growth | Dunham Large vs. Us Small Cap |
| Old Westbury vs. Franklin Mutual Global | Old Westbury vs. Siit Global Managed | Old Westbury vs. Mirova Global Green | Old Westbury vs. Dreyfusstandish Global Fixed |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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