Correlation Between Dunham Real and Mid Cap
Can any of the company-specific risk be diversified away by investing in both Dunham Real and Mid Cap 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 Real and Mid Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dunham Real Estate and Mid Cap Value, you can compare the effects of market volatilities on Dunham Real and Mid Cap 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 Real with a short position of Mid Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dunham Real and Mid Cap.
Diversification Opportunities for Dunham Real and Mid Cap
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dunham and Mid is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Real Estate and Mid Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap Value and Dunham Real 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 Real Estate are associated (or correlated) with Mid Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Cap Value has no effect on the direction of Dunham Real i.e., Dunham Real and Mid Cap go up and down completely randomly.
Pair Corralation between Dunham Real and Mid Cap
Assuming the 90 days horizon Dunham Real Estate is expected to generate 1.35 times more return on investment than Mid Cap. However, Dunham Real is 1.35 times more volatile than Mid Cap Value. It trades about 0.12 of its potential returns per unit of risk. Mid Cap Value is currently generating about 0.14 per unit of risk. If you would invest 1,312 in Dunham Real Estate on September 5, 2024 and sell it today you would earn a total of 197.00 from holding Dunham Real Estate or generate 15.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dunham Real Estate vs. Mid Cap Value
Performance |
| Timeline |
| Dunham Real Estate |
| Mid Cap Value |
Dunham Real and Mid Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dunham Real and Mid Cap
The main advantage of trading using opposite Dunham Real and Mid Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dunham Real position performs unexpectedly, Mid Cap 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 Mid Cap will offset losses from the drop in Mid Cap's long position.| Dunham Real vs. Realty Income | Dunham Real vs. Dynex Capital | Dunham Real vs. First Industrial Realty | Dunham Real vs. Healthcare Realty Trust |
| Mid Cap vs. Forum Real Estate | Mid Cap vs. Dunham Real Estate | Mid Cap vs. Goldman Sachs Real | Mid Cap vs. Pender Real Estate |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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