Correlation Between Dunham Large and Salient Tactical
Can any of the company-specific risk be diversified away by investing in both Dunham Large and Salient Tactical 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 Salient Tactical 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 Salient Tactical Plus, you can compare the effects of market volatilities on Dunham Large and Salient Tactical 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 Salient Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Large and Salient Tactical.
Diversification Opportunities for Dunham Large and Salient Tactical
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dunham and Salient is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Large Cap and Salient Tactical Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient Tactical Plus 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 Salient Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salient Tactical Plus has no effect on the direction of Dunham Large i.e., Dunham Large and Salient Tactical go up and down completely randomly.
Pair Corralation between Dunham Large and Salient Tactical
Assuming the 90 days horizon Dunham Large Cap is expected to generate 2.08 times more return on investment than Salient Tactical. However, Dunham Large is 2.08 times more volatile than Salient Tactical Plus. It trades about 0.1 of its potential returns per unit of risk. Salient Tactical Plus is currently generating about 0.04 per unit of risk. If you would invest 1,714 in Dunham Large Cap on September 12, 2024 and sell it today you would earn a total of 361.00 from holding Dunham Large Cap or generate 21.06% 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. Salient Tactical Plus
Performance |
| Timeline |
| Dunham Large Cap |
| Salient Tactical Plus |
Dunham Large and Salient Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Large and Salient Tactical
The main advantage of trading using opposite Dunham Large and Salient Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Large position performs unexpectedly, Salient Tactical 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 Salient Tactical will offset losses from the drop in Salient Tactical's long position.| Dunham Large vs. Sprott Gold Equity | Dunham Large vs. Vy Goldman Sachs | Dunham Large vs. Short Precious Metals | Dunham Large vs. Precious Metals And |
| Salient Tactical vs. Dodge Cox Stock | Salient Tactical vs. Pace Large Value | Salient Tactical vs. Dunham Large Cap | Salient Tactical vs. Avantis Large Cap |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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