Correlation Between Dunham Large and Western Asset
Can any of the company-specific risk be diversified away by investing in both Dunham Large and Western Asset 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 Western Asset 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 Western Asset E, you can compare the effects of market volatilities on Dunham Large and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Large and Western Asset.
Diversification Opportunities for Dunham Large and Western Asset
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dunham and Western is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Large Cap and Western Asset E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset E 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset E has no effect on the direction of Dunham Large i.e., Dunham Large and Western Asset go up and down completely randomly.
Pair Corralation between Dunham Large and Western Asset
Assuming the 90 days horizon Dunham Large Cap is expected to under-perform the Western Asset. In addition to that, Dunham Large is 1.53 times more volatile than Western Asset E. It trades about -0.16 of its total potential returns per unit of risk. Western Asset E is currently generating about 0.12 per unit of volatility. If you would invest 1,051 in Western Asset E on September 13, 2024 and sell it today you would earn a total of 7.00 from holding Western Asset E or generate 0.67% 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. Western Asset E
Performance |
| Timeline |
| Dunham Large Cap |
| Western Asset E |
Dunham Large and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Large and Western Asset
The main advantage of trading using opposite Dunham Large and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Large position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Dunham Large vs. Counterpoint Tactical Municipal | Dunham Large vs. T Rowe Price | Dunham Large vs. Blrc Sgy Mnp | Dunham Large vs. Bbh Intermediate Municipal |
| Western Asset vs. Franklin Mutual Beacon | Western Asset vs. Templeton Developing Markets | Western Asset vs. Franklin Mutual Global | Western Asset vs. Franklin Mutual Global |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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