Correlation Between Dunham Large and Midcap Fund
Can any of the company-specific risk be diversified away by investing in both Dunham Large and Midcap Fund 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 Midcap Fund 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 Midcap Fund R 3, you can compare the effects of market volatilities on Dunham Large and Midcap Fund 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 Midcap Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Large and Midcap Fund.
Diversification Opportunities for Dunham Large and Midcap Fund
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dunham and Midcap is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Large Cap and Midcap Fund R 3 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midcap Fund R 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 Midcap Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midcap Fund R has no effect on the direction of Dunham Large i.e., Dunham Large and Midcap Fund go up and down completely randomly.
Pair Corralation between Dunham Large and Midcap Fund
Assuming the 90 days horizon Dunham Large is expected to generate 1.03 times less return on investment than Midcap Fund. But when comparing it to its historical volatility, Dunham Large Cap is 1.07 times less risky than Midcap Fund. It trades about 0.13 of its potential returns per unit of risk. Midcap Fund R 3 is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 3,516 in Midcap Fund R 3 on September 4, 2024 and sell it today you would earn a total of 1,009 from holding Midcap Fund R 3 or generate 28.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Large Cap vs. Midcap Fund R 3
Performance |
| Timeline |
| Dunham Large Cap |
| Midcap Fund R |
Dunham Large and Midcap Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Large and Midcap Fund
The main advantage of trading using opposite Dunham Large and Midcap Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Large position performs unexpectedly, Midcap Fund 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 Fund will offset losses from the drop in Midcap Fund's long position.| Dunham Large vs. Energy Basic Materials | Dunham Large vs. Jennison Natural Resources | Dunham Large vs. Clearbridge Energy Mlp | Dunham Large vs. Hennessy Bp Energy |
| Midcap Fund vs. Scharf Global Opportunity | Midcap Fund vs. Legg Mason Global | Midcap Fund vs. Morningstar Global Income | Midcap Fund vs. Ab Global Bond |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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