Correlation Between Dunham Large and American Funds
Can any of the company-specific risk be diversified away by investing in both Dunham Large and American Funds 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 American Funds 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 American Funds 2040, you can compare the effects of market volatilities on Dunham Large and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Large and American Funds.
Diversification Opportunities for Dunham Large and American Funds
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dunham and American is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Large Cap and American Funds 2040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 2040 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds 2040 has no effect on the direction of Dunham Large i.e., Dunham Large and American Funds go up and down completely randomly.
Pair Corralation between Dunham Large and American Funds
Assuming the 90 days horizon Dunham Large Cap is expected to generate 1.31 times more return on investment than American Funds. However, Dunham Large is 1.31 times more volatile than American Funds 2040. It trades about 0.06 of its potential returns per unit of risk. American Funds 2040 is currently generating about 0.0 per unit of risk. If you would invest 2,065 in Dunham Large Cap on August 24, 2024 and sell it today you would earn a total of 21.00 from holding Dunham Large Cap or generate 1.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Large Cap vs. American Funds 2040
Performance |
| Timeline |
| Dunham Large Cap |
| American Funds 2040 |
Dunham Large and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Large and American Funds
The main advantage of trading using opposite Dunham Large and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Large position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Dunham Large vs. Ab Government Exchange | Dunham Large vs. Dws Government Money | Dunham Large vs. Fidelity Series Government | Dunham Large vs. Prudential Government Income |
| American Funds vs. Dreyfus Government Cash | American Funds vs. Us Government Securities | American Funds vs. Us Government Securities | American Funds vs. Aig Government Money |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |